Fridenson Logistic Services Ltd (TLV:FRDN) Pays A ₪0.612816 Dividend In Just Two Days

It looks like Fridenson Logistic Services Ltd (TLV:FRDN) is about to go ex-dividend in the next 2 days. 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 important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. In other words, investors can purchase Fridenson Logistic Services' shares before the 9th of June in order to be eligible for the dividend, which will be paid on the 20th of June.

The company's next dividend payment will be ₪0.612816 per share, and in the last 12 months, the company paid a total of ₪5.21 per share. Based on the last year's worth of payments, Fridenson Logistic Services stock has a trailing yield of around 7.8% on the current share price of ₪51.12. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Fridenson Logistic Services has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Fridenson Logistic Services

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. Fridenson Logistic Services is paying out an acceptable 65% of its profit, a common payout level among most companies. A useful secondary check can be to evaluate whether Fridenson Logistic Services generated enough free cash flow to afford its dividend. It paid out more than half (63%) of its free cash flow in the past year, which is within an average range for most companies.

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 Fridenson Logistic Services 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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's not ideal to see Fridenson Logistic Services's earnings per share have been shrinking at 2.2% a year over the previous five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Fridenson Logistic Services has lifted its dividend by approximately 10% a year on average. That's interesting, but the combination of a growing dividend despite declining earnings can typically only be achieved by paying out more of the company's profits. This can be valuable for shareholders, but it can't go on forever.

To Sum It Up

Is Fridenson Logistic Services an attractive dividend stock, or better left on the shelf? While earnings per share are shrinking, it's encouraging to see that at least Fridenson Logistic Services's dividend appears sustainable, with earnings and cashflow payout ratios that are within reasonable bounds. It's not that we think Fridenson Logistic Services is a bad company, but these characteristics don't generally lead to outstanding dividend performance.

So if you're still interested in Fridenson Logistic Services despite it's poor dividend qualities, you should be well informed on some of the risks facing this stock. For example, we've found 2 warning signs for Fridenson Logistic Services that we recommend you consider before investing in the business.

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.