Two Days Left To Buy Adgar Investments and Development Ltd (TLV:ADGR) Before The Ex-Dividend Date

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Adgar Investments and Development Ltd (TLV:ADGR) is about to go ex-dividend in just 2 days. You can purchase shares before the 21st of March in order to receive the dividend, which the company will pay on the 31st of March.

Adgar Investments and Development's next dividend payment will be ₪0.072 per share, on the back of last year when the company paid a total of ₪0.28 to shareholders. Based on the last year's worth of payments, Adgar Investments and Development stock has a trailing yield of around 4.8% on the current share price of ₪5.861. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Adgar Investments and Development has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Adgar Investments and Development

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Adgar Investments and Development paid a dividend last year despite being unprofitable. This might be a one-off event, but it's not a sustainable state of affairs in the long run. With the recent loss, it's important to check if the business generated enough cash to pay its dividend. If Adgar Investments and Development didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term. Thankfully its dividend payments took up just 48% of the free cash flow it generated, which is a comfortable payout ratio.

Click here to see how much of its profit Adgar Investments and Development 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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Adgar Investments and Development was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.

We'd also point out that Adgar Investments and Development issued a meaningful number of new shares in the past year. It's hard to grow dividends per share when a company keeps creating new shares.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. It looks like the Adgar Investments and Development dividends are largely the same as they were 10 years ago.

We update our analysis on Adgar Investments and Development every 24 hours, so you can always get the latest insights on its financial health, here.

The Bottom Line

From a dividend perspective, should investors buy or avoid Adgar Investments and Development? We're a bit uncomfortable with it paying a dividend while being loss-making. However, we note that the dividend was covered by cash flow. In summary, it's hard to get excited about Adgar Investments and Development from a dividend perspective.

If you want to look further into Adgar Investments and Development, it's worth knowing the risks this business faces. To that end, you should learn about the 3 warning signs we've spotted with Adgar Investments and Development (including 1 which is concerning).

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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