MOBI Industry Co. (TADAWUL:9517) Stock Goes Ex-Dividend In Just Three Days

MOBI Industry Co. (TADAWUL:9517) is about to trade ex-dividend in the next 3 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. 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. In other words, investors can purchase MOBI Industry's shares before the 18th of August in order to be eligible for the dividend, which will be paid on the 29th of August.

The company's next dividend payment will be ر.س0.15 per share, on the back of last year when the company paid a total of ر.س1.00 to shareholders. Based on the last year's worth of payments, MOBI Industry has a trailing yield of 7.3% on the current stock price of ر.س13.66. If you buy this business for its dividend, you should have an idea of whether MOBI Industry's dividend is reliable and sustainable. As a result, readers should always check whether MOBI Industry has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for MOBI Industry

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. MOBI Industry distributed an unsustainably high 124% of its profit as dividends to shareholders last year. Without more sustainable payment behaviour, the dividend looks precarious. 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. Dividends consumed 65% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.

It's good to see that while MOBI Industry'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 MOBI Industry 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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see MOBI Industry has grown its earnings rapidly, up 37% a year for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. MOBI Industry has delivered an average of 71% per year annual increase in its dividend, based on the past three years of dividend payments. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

Is MOBI Industry an attractive dividend stock, or better left on the shelf? MOBI Industry has been growing its earnings per share nicely, although judging by the difference between its profit and cashflow payout ratios, the company might have reported some write-offs over the last year. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're not all that optimistic on its dividend prospects.

So if you want to do more digging on MOBI Industry, you'll find it worthwhile knowing the risks that this stock faces. Our analysis shows 2 warning signs for MOBI Industry that we strongly recommend you have a look at before investing in the company.

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.