Abdulaziz and Mansour Ibrahim Albabtin (TADAWUL:9549) Will Pay A Dividend Of SAR0.50

Abdulaziz and Mansour Ibrahim Albabtin Co. (TADAWUL:9549) will pay a dividend of SAR0.50 on the 22nd of June. The dividend yield is 1.3% based on this payment, which is a little bit low compared to the other companies in the industry.

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Abdulaziz and Mansour Ibrahim Albabtin's Future Dividend Projections Appear Well Covered By Earnings

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Based on the last payment, Abdulaziz and Mansour Ibrahim Albabtin was earning enough to cover the dividend, but free cash flows weren't positive. With the company not bringing in any cash, paying out to shareholders is bound to become difficult at some point.

EPS is set to fall by 52.4% over the next 12 months if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio could be 66%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.

View our latest analysis for Abdulaziz and Mansour Ibrahim Albabtin

Abdulaziz and Mansour Ibrahim Albabtin's Dividend Has Lacked Consistency

The track record isn't the longest, but we are already seeing a bit of instability in the payments. Since 2023, the annual payment back then was SAR1.00, compared to the most recent full-year payment of SAR0.50. The dividend has fallen 50% over that period. Generally, we don't like to see a dividend that has been declining over time as this can degrade shareholders' returns and indicate that the company may be running into problems.

The Dividend Has Limited Growth Potential

Dividends have been going in the wrong direction, so we definitely want to see a different trend in the earnings per share. Earnings per share has been sinking by 52% over the last five years. This steep decline can indicate that the business is going through a tough time, which could constrain its ability to pay a larger dividend each year in the future.

Abdulaziz and Mansour Ibrahim Albabtin's Dividend Doesn't Look Sustainable

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. We don't think Abdulaziz and Mansour Ibrahim Albabtin is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 3 warning signs for Abdulaziz and Mansour Ibrahim Albabtin (1 is concerning!) that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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