Fox-Wizel Ltd. (TLV:FOX) Stock Goes Ex-Dividend In Just Three Days

Readers hoping to buy Fox-Wizel Ltd. (TLV:FOX) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Meaning, you will need to purchase Fox-Wizel's shares before the 11th of September to receive the dividend, which will be paid on the 25th of September.

The company's next dividend payment will be ₪4.4502201 per share, on the back of last year when the company paid a total of ₪8.08 to shareholders. Looking at the last 12 months of distributions, Fox-Wizel has a trailing yield of approximately 2.9% on its current stock price of ₪274.20. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Fox-Wizel

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Fox-Wizel is paying out an acceptable 53% of its profit, a common payout level among most companies. A useful secondary check can be to evaluate whether Fox-Wizel generated enough free cash flow to afford its dividend. The good news is it paid out just 8.8% of its free cash flow in the last year.

It's positive to see that Fox-Wizel's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see how much of its profit Fox-Wizel 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. With that in mind, we're encouraged by the steady growth at Fox-Wizel, with earnings per share up 6.3% on average over the last five years. While earnings have been growing at a credible rate, the company is paying out a majority of its earnings to shareholders. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Fox-Wizel has increased its dividend at approximately 8.3% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Should investors buy Fox-Wizel for the upcoming dividend? Earnings per share growth has been modest and Fox-Wizel paid out over half of its profits and less than half of its free cash flow, although both payout ratios are within normal limits. In summary, it's hard to get excited about Fox-Wizel from a dividend perspective.

In light of that, while Fox-Wizel has an appealing dividend, it's worth knowing the risks involved with this stock. Our analysis shows 2 warning signs for Fox-Wizel that we strongly recommend you have a look at before investing in the company.

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.