Mivne Real Estate (K.D) Ltd (TLV:MVNE) Looks Interesting, And It's About To Pay A Dividend

Readers hoping to buy Mivne Real Estate (K.D) Ltd (TLV:MVNE) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Accordingly, Mivne Real Estate (K.D) investors that purchase the stock on or after the 25th of March will not receive the dividend, which will be paid on the 8th of April.

The company's next dividend payment will be ₪0.0949534 per share, and in the last 12 months, the company paid a total of ₪0.14 per share. Looking at the last 12 months of distributions, Mivne Real Estate (K.D) has a trailing yield of approximately 1.3% on its current stock price of ₪10.39. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Mivne Real Estate (K.D) can afford its dividend, and if the dividend could grow.

View our latest analysis for Mivne Real Estate (K.D)

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. Mivne Real Estate (K.D) paid out a comfortable 35% of its profit last year. A useful secondary check can be to evaluate whether Mivne Real Estate (K.D) generated enough free cash flow to afford its dividend. Fortunately, it paid out only 28% of its free cash flow in the past year.

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 Mivne Real Estate (K.D) paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at Mivne Real Estate (K.D), with earnings per share up 5.5% on average over the last five years. Management have been reinvested more than half of the company's earnings within the business, and the company has been able to grow earnings with this retained capital. We think this is generally an attractive combination, as dividends can grow through a combination of earnings growth and or a higher payout ratio over time.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. It looks like the Mivne Real Estate (K.D) dividends are largely the same as they were five years ago.

The Bottom Line

From a dividend perspective, should investors buy or avoid Mivne Real Estate (K.D)? Earnings per share have been growing moderately, and Mivne Real Estate (K.D) is paying out less than half its earnings and cash flow as dividends, which is an attractive combination as it suggests the company is investing in growth. It might be nice to see earnings growing faster, but Mivne Real Estate (K.D) is being conservative with its dividend payouts and could still perform reasonably over the long run. It's a promising combination that should mark this company worthy of closer attention.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Our analysis shows 3 warning signs for Mivne Real Estate (K.D) that we strongly recommend you have a look at before investing in the company.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.