40% of all companies traded on the Tel Aviv Stock Exchange have distributed dividends

Over the past few years, about 40% of all companies traded on the Tel Aviv Stock Exchange have distributed dividends to their shareholders, according to a survey conducted by analyst Yuval Tzuk of the TASE Research Department for 2014 to 2019. Of all companies that distributed a dividend, more than 80% (164 companies) Dividend classes regularly.
Dividend distribution is a positive signal for investors about the company's profitability and transmits expectations about the future, while strengthening its position and image among investors. A situation where a dividend-dividing company does not divide a particular year, or a lower proportion, may be a negative signal for investors.
The study defined a company that regularly dividends as a company that meets one of the following criteria: distributed dividends in at least five of the past six years (2014 through 2019); Has distributed dividends continuously over the past four years (2016 to 2019); Distributed dividends for the past two years after announcing a new dividend distribution policy. A company that meets the above criteria but announced the cancellation of its dividend distribution policy in the past year - is no longer considered a dividend department regularly.
Cliff's research was based on a sample of 400 companies whose shares were traded on the stock exchange at the end of September 2019, and do not include companies whose shares are on the list of retention or suspension, nor do they include companies whose shares were first traded in 2018 or 2019.
The study found that 41% (about 164 companies) of the 400 companies that were regularly dividend-tested in the sample. Two-thirds of companies that regularly distribute dividends (109 companies) have a declared dividend distribution policy, while the rest regularly distribute without adopting any or non-binding general policies.
The study also found that the proportion of dividend companies regularly is higher as larger companies are concerned. The study found that 68% of the companies in the TA index have 35 dividend classes regularly, about 66% of the TA 90 index, about 36% of the SME60 index and about 38% of the TA growth.
The survey shows that seven of the nine stock exchange-traded banks (78%) regularly distribute a dividend. The two banks that do not distribute a dividend are a union, which is in the process of merger and acquisition by Mizrahi Tefahot (and declared a dividend in December 2019 under the merger agreement), and a municipal merger into Mercantile Discount was completed in December 2019.
Bank Hapoalim was indeed a dividend dispute in 2019, following the announcement by the Banking Supervisor in 2018 that at this time there is no room for distributing a current dividend due to uncertainties about the investigation by the US authorities. But following the sale of Isracard shares, the bank generated high capital surpluses and was allowed to distribute a high dividend. Bank Leumi has returned dividends in 2017 for the first time since 2011, after meeting its capital adequacy targets. Discount Bank has returned in the last two years to distribute dividends with regulatory approval under a new policy adopted at the end of 2017.
Four of the seven insurance companies (57%) regularly distribute dividends - Harel Investments, Migdal Insurance, Menorah Mivtachim and IDI Insurance Company. Thirteen of 18 financial services industry companies (72%) regularly distribute dividends.
The high yielding real estate sector, which includes companies with cash flow and profitability stability, as well as real estate investment funds (REITs) that are committed to a dividend (90% of taxable income), stand out with a high proportion of departments regularly (57%). Among the companies mainly engaged in real estate The rate of return in Israel is high (71%), twice that of the companies mainly engaged in real estate abroad (35%).
The sector at the bottom of the dividend divisions is the biomed branch, with Perrigo being the only one of 44 companies (2%) in the dividend division regularly. Most Biomed companies are non-profit-worthy companies, and need cash to fund their growth. Teva ceased to distribute dividends after its difficulties.
In most oil and gas partnerships, the agreement stipulates that all profits of the distributable partnership will be distributed to the partnership partners. Only the two big and profitable partnerships, Drilling Drill and Isramco, share their profits every year, while the other partnerships are not yet profitable. Tamar Petroleum, which was listed for trading in 2017, is the only one of the five oil and gas companies to regularly distribute dividends in accordance with its bylaws.