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Only three days before Leejam Sports Company (TADAWUL: 1830) negotiates an ex-dividend

Leejam Sports Society (TADAWUL:1830) the stock is set to trade ex-dividend in three days. The ex-dividend date is one business day before the record date, which is the latest date by which shareholders must be present on the books of the company to be eligible for payment of a 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. This means you will need to buy shares of Leejam Sports by May 11 to receive the dividend, which will be paid on May 23.

The company’s next dividend payment will be £0.47 per share, following last year when the company paid a total of £3.48 to shareholders. Looking at the last 12 months of distributions, Leejam Sports has a yield of around 3.1% on its current share price of SAR 110.6. If you’re buying this company for its dividend, you should get an idea of ​​the reliability and sustainability of Leejam Sports’ dividend. So we need to consider if Leejam Sports can afford its dividend and if the dividend could increase.

See our latest analysis for Leejam Sports

If a company pays out more dividends than it has earned, the dividend may become unsustainable – a less than ideal situation. Leejam Sports paid out more than half (52%) of its revenue last year, which is a regular payout ratio for most companies. 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. It distributed 43% of its free cash flow as dividends, a comfortable level of distribution for most companies.

It is positive to see Leejam Sports’ dividend being covered by both earnings and cash flow, as this is usually a sign that the dividend is sustainable, and a lower payout ratio usually suggests a higher margin. security before the dividend is cut.

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

SASE: 1830 Historic dividend May 7, 2022

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. That’s why it’s a relief to see Leejam Sports’ earnings per share growing by 5.1% annually over the past five years. While earnings have grown at a believable pace, the company pays the majority of its profits to shareholders. If management raises the payout ratio further, we’ll take that as a tacit signal that the company’s growth prospects are slowing.

Most investors primarily gauge a company’s dividend prospects by checking the historical rate of dividend growth. Over the past four years, Leejam Sports has increased its dividend by around 16% per year on average. We are pleased to see dividends increasing alongside earnings over several years, which may be a sign that the company intends to share the growth with shareholders.

To summarize

Is Leejam Sports an attractive dividend stock, or is it better left on the shelf? While earnings per share growth has been modest, Leejam Sports’ dividend payouts are around an average level; without a big change in earnings, we believe the dividend is likely somewhat sustainable. Fortunately, the company paid out a moderately small percentage of its free cash flow. All in all, not a bad combination, but we believe there are probably more attractive dividend prospects.

On that note, you’ll want to research the risks that Leejam Sports faces. Our analysis shows 1 warning sign for Leejam Sports and you should be aware of this before buying stocks.

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.