Aberdeen Total Dynamic Dividend Fund (AOD): A Deep Dive into Its Dividend Performance and ...
Unraveling the dividend history, yield, growth, and sustainability of the Aberdeen Total Dynamic Dividend Fund (NYSE:AOD)
Recently, Aberdeen Total Dynamic Dividend Fund (NYSE:AOD) announced a dividend of $0.06 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-21. This announcement has turned the investor spotlight on the company's dividend history, yield, and growth rates. Let's delve into Aberdeen Total Dynamic Dividend Fund's dividend performance using GuruFocus data and evaluate its sustainability.
Overview of Aberdeen Total Dynamic Dividend Fund
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Aberdeen Total Dynamic Dividend Fund is a diversified, closed-end management investment company. It aims to offer high current dividend income, with a secondary focus on long-term capital growth.
Tracing Aberdeen Total Dynamic Dividend Fund's Dividend History
Since 2007, Aberdeen Total Dynamic Dividend Fund has consistently paid out dividends on a monthly basis. The chart below provides a historical overview of the annual Dividends Per Share.
Dissecting Aberdeen Total Dynamic Dividend Fund's Dividend Yield and Growth
Currently, Aberdeen Total Dynamic Dividend Fund has a 12-month trailing dividend yield and a 12-month forward dividend yield of 8.77%. This indicates an expectation of consistent dividend payments over the next 12 months. Considering the dividend yield and five-year growth rate, the 5-year yield on cost of Aberdeen Total Dynamic Dividend Fund stock stands at approximately 8.77% as of today.
Is the Dividend Sustainable? Analyzing Payout Ratio and Profitability
The sustainability of a dividend is often gauged by the company's payout ratio. The dividend payout ratio reveals the percentage of earnings distributed as dividends. A lower ratio suggests that the company retains a significant portion of its earnings, ensuring funds for future growth and unexpected downturns. As of 2023-04-30, Aberdeen Total Dynamic Dividend Fund's dividend payout ratio is 1.73, raising questions about the sustainability of its dividends.
The company's profitability rank, which offers insights into its earnings prowess relative to its peers, is currently 2 out of 10. This, combined with the fact that the company has reported net profit in only 4 out of the past 10 years, further fuels concerns about the sustainability of its dividends.
Assessing Growth Metrics for Future Outlook
Robust growth metrics are essential for the sustainability of dividends. However, Aberdeen Total Dynamic Dividend Fund's growth rank of 2 out of 10 suggests that the company has limited growth prospects, which could impact the sustainability of its dividends.
Final Thoughts
In conclusion, while Aberdeen Total Dynamic Dividend Fund has a commendable history of dividend payments, its current payout ratio, profitability rank, and growth metrics raise concerns about the sustainability of its dividends. Investors should closely monitor these factors while considering this stock for their dividend portfolio. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
