Mizrahi Tefahot Bank Ltd. (TLV:MZTF) looks like a good stock, and it will soon be ex-dividend

Some investors rely on dividends to grow their wealth, and if you’re one of those dividend sleuths, you might be intrigued to know that Mizrahi Tefahot Bank Ltd. (TLV:MZTF) is set to go ex-dividend in just two days. The ex-dividend date is usually one business day before the record date which is the latest date by which you must be present on the books of the company as a shareholder in order to receive the dividend. The ex-dividend date is an important date to know because any purchase of shares made on or after this date may mean late settlement which does not appear on the record date. As a result, Mizrahi Tefahot Bank investors who buy the stock on or after March 8 will not receive the dividend, which will be paid on March 15.

The company’s next dividend payment will be ₪1.06 per share, and in the past 12 months the company has paid a total of ₪11.74 per share. Last year’s total dividend payments show that Mizrahi Tefahot Bank has a yield of 5.0% on the current share price of ₪118.6. If you are buying this company for its dividend, you should get an idea of ​​the reliability and sustainability of Mizrahi Tefahot Bank’s dividend. We therefore need to check whether dividend payments are covered and whether profits are increasing.

Check out our latest analysis for Mizrahi Tefahot Bank

Dividends are usually paid out of company earnings, so if a company pays out more than it has earned, its dividend is usually at risk of being reduced. That’s why it’s good to see Mizrahi Tefahot Bank paying out a modest 47% of its profits.

When a company has paid out less in dividends than it has earned in profits, this generally suggests that its dividend is affordable. The lower the percentage of its profits it pays out, the greater the margin of safety for the dividend if the company goes into a recession.

Click here to see the company’s payout ratio, as well as analysts’ estimates of its future dividends.

TASE: MZTF Historic Dividend March 5, 2022

Have earnings and dividends increased?

Companies with consistently rising earnings per share tend to create the best dividend-paying stocks because they generally find it easier to increase dividends per share. If earnings fall and the company is forced to cut its dividend, investors could see the value of their investment go up in smoke. Luckily for readers, Mizrahi Tefahot Bank’s earnings per share have grown 18% annually over the past five years.

Another key way to gauge a company’s dividend outlook is to measure its historical rate of dividend growth. Mizrahi Tefahot Bank has recorded dividend growth of 19% per year on average over the past 10 years. Earnings per share and dividends have both increased rapidly lately, which is great to see.

The essential

Has Mizrahi Tefahot Bank got what it takes to maintain its dividend payments? Companies like Mizrahi Tefahot Bank, which grow rapidly and pay out only a small fraction of profits, usually reinvest heavily in their business. This strategy can add significant shareholder value over the long term – as long as it is accomplished without issuing too many new shares. In summary, Mizrahi Tefahot Bank looks promising as a dividend-paying stock, and we suggest you take a closer look.

With this in mind, an essential part of thorough stock research is to be aware of all the risks stocks currently face. For example, we have identified 2 warning signs for Mizrahi Tefahot Bank (1 doesn’t sit too well with us) you should know.

A common investment mistake is to buy the first good stock you see. Here you can find a complete list of high yielding dividend stocks.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.