Adams Diversified Equity Fund Inc's Dividend Analysis
Assessing the Upcoming Dividend and Historical Performance of ADX
Adams Diversified Equity Fund Inc (NYSE:ADX) recently announced a dividend of $1.15 per share, payable on 2023-12-20, with the ex-dividend date set for 2023-11-17. 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 Adams Diversified Equity Fund Inc's dividend performance and assess its sustainability.
Understanding Adams Diversified Equity Fund Inc
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Adams Diversified Equity Fund Inc is a diversified investment company. It operates as an internally-managed closed-end fund with the primary objectives of capital preservation, reasonable income from investments, and the opportunity for capital appreciation.
Adams Diversified Equity Fund Inc's Dividend Track Record
Adams Diversified Equity Fund Inc has a longstanding tradition of distributing dividends, with a consistent dividend payment record dating back to 1987. The dividends are currently distributed on a quarterly basis. Below is a chart illustrating the annual Dividends Per Share to highlight historical trends.
Dividend Yield and Growth Insights
As of today, Adams Diversified Equity Fund Inc boasts a 12-month trailing dividend yield of 6.06% and a 12-month forward dividend yield of 7.39%, indicating a potential increase in dividend payments over the next year.
Over the past three years, Adams Diversified Equity Fund Inc's annual dividend growth rate was 64.60%. When we extend this to a five-year horizon, the growth rate slightly decreases to 62.20% per year. The 5-year yield on cost for Adams Diversified Equity Fund Inc stock is an impressive 68.03% as of today.
Evaluating Dividend Sustainability
When assessing dividend sustainability, the dividend payout ratio is a critical metric. As of 2023-06-30, Adams Diversified Equity Fund Inc's dividend payout ratio stands at 0.34, which suggests that the company retains a substantial portion of its earnings for growth and to cushion against downturns.
Another aspect to consider is the profitability rank. Adams Diversified Equity Fund Inc's profitability rank is currently 2 out of 10 as of 2023-06-30, which raises concerns about the long-term sustainability of its dividends, especially considering that the company has only reported a net profit in 4 of the past 10 years.
Prospects for Growth
Adams Diversified Equity Fund Inc's future dividend sustainability is also reliant on its growth metrics. Currently, the company's growth rank is 2 out of 10, indicating that Adams Diversified Equity Fund Inc may face challenges in sustaining its dividend over the long term due to poor growth prospects.
Investor Considerations and Conclusion
While the dividend yield and historical growth rates for Adams Diversified Equity Fund Inc are attractive, the payout ratio, profitability rank, and growth rank present a more nuanced picture. Investors should weigh these factors carefully when considering the sustainability of Adams Diversified Equity Fund Inc's dividends. For those seeking to expand their portfolio with high-dividend yield stocks, GuruFocus Premium offers a comprehensive High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
