Should income investors watch Dr. Sulaiman Al Habib’s (TADAWUL:4013) medical services group company ahead of its ex-dividend?

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Dr. Sulaiman Al Habib Medical Services Group Company (TADAWUL:4013) the stock is set to trade ex-dividend in two days. The ex-dividend date is one business day before a company’s record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important because each time a stock is bought or sold, the transaction takes at least two business days to settle. Therefore, if you buy shares of Dr. Sulaiman Al Habib Medical Services Group on or after August 14, you will not be eligible to receive the dividend when it is paid on August 29.

The company’s next dividend payment will be £0.86 per share, following last year when the company paid a total of £3.32 to shareholders. Based on last year’s payouts, Dr Sulaiman Al Habib’s Medical Services Group stock has a yield of around 1.5% on the current stock price of SAR216. We love to see companies pay out a dividend, but it’s also important to make sure that laying the golden eggs doesn’t kill our golden hen! Therefore, readers should always check whether Dr. Sulaiman Al Habib Medical Services Group was able to increase its dividend or if the dividend could be reduced.

Check out our latest analysis for Dr. Sulaiman Al Habib Medical Services Group

Dividends are usually paid out of company profits, 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 Dr. Sulaiman Al Habib Medical Services Group donating a modest 32% of its earnings. Still, cash flow is usually more important than earnings in assessing dividend sustainability, so we always need to check whether the company has generated enough cash to pay its dividend. The company paid out 107% of its free cash flow over the past year, which we believe is outside the ideal range for most companies. Cash flow is generally much more volatile than earnings, so this could be a temporary effect – but we’d generally want to take a closer look here.

Dr. Sulaiman Al Habib Medical Services Group paid less dividends than it reported profit, but unfortunately it did not generate enough cash to cover the dividend. If this happens repeatedly, it would pose a risk to the ability of Dr. Sulaiman Al Habib Medical Services Group to maintain its dividend.

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

SASE:4013 Historic dividend August 11, 2022

Have earnings and dividends increased?

Companies with strong growth prospects are generally the best dividend payers because it is easier to increase dividends when earnings per share improve. If earnings fall enough, the company could be forced to cut its dividend. That’s why it’s a relief to see that the earnings per share of Dr. Sulaiman Al Habib Medical Services Group has increased by 8.5% annually over the past five years. Earnings have been growing at a steady pace, but we fear dividend payments have consumed the bulk of the company’s cash flow over the past year.

Another key way to gauge a company’s dividend outlook is to measure its historical rate of dividend growth. Since our data began two years ago, Dr. Sulaiman Al Habib Medical Services Group has increased its dividend by about 29% per year on average. It’s encouraging to see the company increasing its dividends as earnings rise, suggesting at least some corporate interest in rewarding shareholders.

The essential

Is Dr. Sulaiman Al Habib’s Medical Services Group Worth Buying For Its Dividend? Dr. Sulaiman Al Habib Medical Services Group has seen reasonable growth in earnings per share lately and paid out less than half of its profit and 107% of its cash flow over the past year, which is a result poor. In summary, although it has some positive characteristics, we are not inclined to rush and buy Dr. Sulaiman Al Habib Medical Services Group today.

Wondering what the future holds for Dr. Sulaiman Al Habib Medical Services Group? See the forecasts of the six analysts we follow, with this visualization of its historical and future estimated earnings and cash flow

As a general rule, we don’t recommend simply buying the first dividend-paying stock you see. Here is a curated list of attractive stocks that are strong dividend payers.

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.

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