This article first appeared on GuruFocus .
Evaluating the Sustainability of Matrix IT Ltd's Upcoming Dividend Payout
Matrix IT Ltd ( RMTHF ) recently announced a total dividend of $0.33 per share with the ex-dividend date set for 2026-09-10, including $0.33 per share cash dividend payable on 2026-10-06. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Matrix IT Ltd's dividend performance and assess its sustainability. For value investors, understanding whether this payout is supported by durable earnings and cash flow is essential before making any portfolio decisions.
What Does Matrix IT Ltd Do?
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Matrix IT Ltd is an information technology services provider based in Israel. It offers software, hardware, and technology consulting solutions to clients in areas like data and analytics, cloud, AI, cybersecurity, and digital transformation, among others, to its clients in domestic as well as international markets. The company's operating segments are: IT solutions and services, consulting and management in Israel; Marketing and support of software products; Cloud infrastructure and computing; and Solutions and IT services in the USA. The majority of its revenue is derived from the IT solutions and services, consulting and management in Israel business.
A Glimpse at Matrix IT Ltd's Dividend History
Matrix IT Ltd has maintained a consistent dividend payment record since 2025. Dividends are currently distributed on a quarterly basis, a cadence that offers investors a steady stream of income throughout the year rather than a single annual payout. Quarterly distributions can also signal management's confidence in the predictability of the company's cash generation. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Matrix IT Ltd's Dividend Yield and Growth
As of today, Matrix IT Ltd currently has a 12-month trailing dividend yield of 3.23% and a 12-month forward dividend yield of 3.45%. This suggests an expectation of increased dividend payments over the next 12 months. For context, the trailing yield reflects dividends actually paid over the past year, while the forward yield estimates what investors might receive based on the most recent declared payout annualized. The gap between the two figures implies the company is on a modestly rising distribution path, which may appeal to income-focused investors comparing opportunities across the technology services sector.
Over the past three years, Matrix IT Ltd's annual dividend growth rate was -8.40%. Extended to a five-year horizon, this rate increased to 9.70% per year. And over the past decade, Matrix IT Ltd's annual dividends per share growth rate stands at an impressive 12.00%. This pattern a recent dip set against stronger medium- and long-term expansion suggests the three-year contraction may reflect a normalization after earlier increases rather than a structural decline in the company's commitment to returning capital to shareholders.
Based on Matrix IT Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Matrix IT Ltd stock as of today is approximately 5.13%. Yield on cost measures the annual dividend return an investor earns relative to their original purchase price, assuming dividends are reinvested and grow at the historical rate. A figure above the current yield implies that long-term holders have seen their income stream outpace the initial investment's yield, a hallmark of compounding dividend growth.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2026-06-30, Matrix IT Ltd's dividend payout ratio is 0.69, meaning roughly 69% of earnings are paid out. While this leaves a reasonable cushion, it also indicates that future dividend increases will depend heavily on continued earnings expansion.
Matrix IT Ltd's profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Matrix IT Ltd's profitability 9 out of 10 as of 2026-06-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability. This unbroken earnings record is a meaningful signal for dividend investors, as sustained profits are the foundation upon which reliable distributions are built.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Matrix IT Ltd's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. A high growth rank, combined with a high profitability rank, points to a business that is both expanding and converting that expansion into bottom-line results a combination that historically supports rising dividend payouts over time.
Revenue is the lifeblood of any company, and Matrix IT Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Matrix IT Ltd's revenue has increased by approximately 9.70% per year on average, a rate that outperforms approximately 59.56% of global competitors. Steady top-line expansion gives management the flexibility to fund dividends, reinvest in the business, or reduce debt without straining the balance sheet.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Matrix IT Ltd's earnings increased by approximately 11.80% per year on average, a rate that outperforms approximately 49.15% of global competitors. Earnings growth that outpaces dividend growth generally leaves room for future payout increases.
Lastly, the company's 5-year EBITDA growth rate of 12.20%, which outperforms approximately 50.77% of global competitors, reinforces the picture of a business generating steadily rising operating cash flow. EBITDA growth is particularly relevant for dividend safety because it reflects cash generated before financing and accounting decisions, giving a clearer view of the company's underlying ability to fund distributions.
Next Steps
Matrix IT Ltd's upcoming $0.33 per share dividend, payable on 2026-10-06 to shareholders of record ahead of the 2026-09-10 ex-dividend date, rests on a broadly supportive foundation. The payout ratio of 0.69 is manageable, profitability ranks 9 out of 10, and growth ranks 9 out of 10, with revenue, EPS, and EBITDA all expanding at double-digit or near-double-digit rates over recent periods. The three-year dividend growth rate of -8.40% is a caution flag worth monitoring, but the five-year and ten-year growth rates of 9.70% and 12.00% suggest the longer-term trend remains intact. Value investors should weigh these strengths against the modest payout cushion and the cyclical nature of IT services spending. Does Matrix IT Ltd's blend of profitability and growth justify a place in your income portfolio?
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