Hamashbir 365 Ltd (TLV:MSBI) Stock Goes Ex-Dividend In Just Two Days

It looks like Hamashbir 365 Ltd (TLV:MSBI) is about to go ex-dividend in the next two days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. 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. This means that investors who purchase Hamashbir 365's shares on or after the 8th of April will not receive the dividend, which will be paid on the 17th of April.

The company's next dividend payment will be ₪0.0257363 per share, on the back of last year when the company paid a total of ₪0.051 to shareholders. Last year's total dividend payments show that Hamashbir 365 has a trailing yield of 5.2% on the current share price of ₪0.99. If you buy this business for its dividend, you should have an idea of whether Hamashbir 365's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for Hamashbir 365

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Hamashbir 365 distributed an unsustainably high 184% of its profit as dividends to shareholders last year. Without extenuating circumstances, we'd consider the dividend at risk of a cut. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Luckily it paid out just 8.1% of its free cash flow last year.

It's good to see that while Hamashbir 365's dividends were not covered by profits, at least they are affordable from a cash perspective. Still, if the company repeatedly paid a dividend greater than its profits, we'd be concerned. Very few companies are able to sustainably pay dividends larger than their reported earnings.

Click here to see how much of its profit Hamashbir 365 paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. It's encouraging to see Hamashbir 365 has grown its earnings rapidly, up 57% a year for the past five years.

Unfortunately Hamashbir 365 has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

To Sum It Up

From a dividend perspective, should investors buy or avoid Hamashbir 365? It's good to see earnings per share growing and low cashflow payout ratio, although we're uncomfortable with Hamashbir 365's paying out such a high percentage of its profit. Overall, it's hard to get excited about Hamashbir 365 from a dividend perspective.

On that note, you'll want to research what risks Hamashbir 365 is facing. To help with this, we've discovered 3 warning signs for Hamashbir 365 that you should be aware of before investing in their shares.

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.