Interested In Banan Real Estate's (TADAWUL:4324) Upcoming ر.س0.025 Dividend? You Have Three Days Left

It looks like Banan Real Estate Company (TADAWUL:4324) is about to go ex-dividend in the next three days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a 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. Accordingly, Banan Real Estate investors that purchase the stock on or after the 3rd of August will not receive the dividend, which will be paid on the 19th of August.

The company's upcoming dividend is ر.س0.025 a share, following on from the last 12 months, when the company distributed a total of ر.س0.06 per share to shareholders. Based on the last year's worth of payments, Banan Real Estate has a trailing yield of 1.3% on the current stock price of ر.س4.51. 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! So we need to investigate whether Banan Real Estate can afford its dividend, and if the dividend could grow.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Banan Real Estate paid out a comfortable 38% of its profit last year. A useful secondary check can be to evaluate whether Banan Real Estate generated enough free cash flow to afford its dividend. The good news is it paid out just 24% of its free cash flow in the last year.

It's positive to see that Banan Real Estate'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.

Check out our latest analysis for Banan Real Estate

Click here to see how much of its profit Banan Real Estate paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Banan Real Estate's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 44% a year over the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Banan Real Estate has delivered 4.7% dividend growth per year on average over the past four years.

Final Takeaway

Is Banan Real Estate an attractive dividend stock, or better left on the shelf? Earnings per share are down meaningfully, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend needs to be cut. In summary, it's hard to get excited about Banan Real Estate from a dividend perspective.

Keen to explore more data on Banan Real Estate's financial performance? Check out our visualisation of its historical revenue and earnings growth.

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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.