Hiron-Trade Investments & Industrial Buildings Ltd (TLV:HRON) Pays A ₪20.00 Dividend In Just Four Days

Readers hoping to buy Hiron-Trade Investments & Industrial Buildings Ltd (TLV:HRON) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Accordingly, Hiron-Trade Investments & Industrial Buildings investors that purchase the stock on or after the 2nd of January will not receive the dividend, which will be paid on the 12th of January.

The company's next dividend payment will be ₪20.00 per share, and in the last 12 months, the company paid a total of ₪40.00 per share. Last year's total dividend payments show that Hiron-Trade Investments & Industrial Buildings has a trailing yield of 1.8% on the current share price of ₪2273.00. If you buy this business for its dividend, you should have an idea of whether Hiron-Trade Investments & Industrial Buildings's dividend is reliable and sustainable. As a result, readers should always check whether Hiron-Trade Investments & Industrial Buildings has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Hiron-Trade Investments & Industrial Buildings

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Hiron-Trade Investments & Industrial Buildings has a low and conservative payout ratio of just 18% of its income after tax. A useful secondary check can be to evaluate whether Hiron-Trade Investments & Industrial Buildings generated enough free cash flow to afford its dividend. Thankfully its dividend payments took up just 31% of the free cash flow it generated, which is a comfortable payout ratio.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see how much of its profit Hiron-Trade Investments & Industrial Buildings paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. So we're not too excited that Hiron-Trade Investments & Industrial Buildings's earnings are down 2.3% a year over the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Hiron-Trade Investments & Industrial Buildings has lifted its dividend by approximately 15% a year on average.

Final Takeaway

Should investors buy Hiron-Trade Investments & Industrial Buildings for the upcoming dividend? Earnings per share are down meaningfully, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend needs to be cut. Overall, it's not a bad combination, but we feel that there are likely more attractive dividend prospects out there.

On that note, you'll want to research what risks Hiron-Trade Investments & Industrial Buildings is facing. Case in point: We've spotted 1 warning sign for Hiron-Trade Investments & Industrial Buildings you should be aware of.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.