Lapidoth Capital Ltd (TLV:LAPD) has passed our checks and is set to pay a dividend of ₪0.39
Looks like Lapidoth Capital Ltd (TLV:LAPD) is set to go ex-dividend in the next three days. The ex-dividend date is one business day before a company’s record date, which is the date the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important because the settlement process involves two full business days. So if you miss this date, you will not be on the company’s books as of the record date. As a result, Lapidoth Capital investors who purchase the shares on or after June 7 will not receive the dividend, which will be paid on June 20.
The company’s next dividend payment will be ₪0.39 per share. Last year, in total, the company distributed ₪0.79 to shareholders. Looking at the past 12 months of distributions, Lapidoth Capital has a yield of around 2.1% on its current share price of ₪56.09. Dividends are an important source of income for many shareholders, but the health of the company is essential to sustaining those dividends. We therefore need to check whether dividend payments are covered and whether profits are increasing.
See our latest analysis for Lapidoth Capital
If a company pays out more dividends than it has earned, the dividend may become unsustainable – a less than ideal situation. That’s why it’s good to see Lapidoth Capital paying out a modest 31% of its profits. That said, even very profitable companies can sometimes not generate enough cash to pay the dividend, so we should always check if the dividend is covered by cash flow. Fortunately, it only paid out 6.3% of its free cash flow last year.
It is encouraging to see that the dividend is covered by both earnings and cash flow. This generally suggests that the dividend is sustainable, as long as earnings don’t drop precipitously.
Click here to see how much profit Lapidoth Capital has paid out over the past 12 months.
Have earnings and dividends increased?
Stocks of companies that generate sustainable earnings growth often offer the best dividend prospects because it is easier to increase the dividend when earnings increase. If business goes into a recession and the dividend is cut, the company could see its value drop precipitously. It is encouraging to see that Lapidoth Capital has been growing its profits rapidly, up 23% per year over the past five years. Lapidoth Capital pays out less than half of its earnings and cash flow, while simultaneously growing earnings per share at a rapid pace. This is a very favorable combination that can often lead to dividend multiplication in the long run, if profits increase and the company pays out a higher percentage of its profits.
Most investors primarily gauge a company’s dividend prospects by checking the historical rate of dividend growth. Since our data began nine years ago, Lapidoth Capital has increased its dividend by around 20% per year on average. Earnings per share and dividends have both increased rapidly lately, which is great to see.
Is Lapidoth Capital an attractive dividend-paying stock, or better left on the shelf? Lapidoth Capital increased its earnings per share while simultaneously reinvesting in the business. Unfortunately, it has cut the dividend at least once in the past nine years, but the conservative payout ratio makes the current dividend look sustainable. Lapidoth Capital seems solid on this analysis overall, and we would definitely consider looking into it further.
Although it is tempting to invest in Lapidoth Capital just for the dividends, you should always be aware of the risks involved. For example, we found 4 warning signs for Lapidoth Capital which we recommend you consider before investing in the company.
If you are looking for good dividend payers, we recommend by consulting our selection of the best dividend-paying stocks.
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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.