Assessing the Future Dividend Potential of Voya Emerging Markets High Dividend Equity Fund (IHD)
Analysing the Dividend History, Yield, Growth and Sustainability of Voya Emerging Markets High Dividend Equity Fund (NYSE:IHD)
Voya Emerging Markets High Dividend Equity Fund (NYSE:IHD) recently announced a dividend of $0.14 per share, payable on 2023-10-16, with the ex-dividend date set for 2023-10-02. 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 deep dive into Voya Emerging Markets High Dividend Equity Fund's dividend performance and assess its sustainability.
What Does Voya Emerging Markets High Dividend Equity Fund Do?
Voya Emerging Markets High Dividend Equity Fund is a diversified closed-end management investment company. Its primary investment objective is to provide total return through a combination of current income, capital gains, and capital appreciation. It seeks to achieve its investment objectives by investing principally in a portfolio of equity securities, and issuers in emerging market countries. The Fund will also normally seek to secure gains and enhance the stability of returns over a market cycle by writing (selling) call options on selected exchange-traded funds (ETFs) and/or international, regional, or country indices of equity securities, and/or on equity securities.
A Glimpse at Voya Emerging Markets High Dividend Equity Fund's Dividend History
Voya Emerging Markets High Dividend Equity Fund has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Voya Emerging Markets High Dividend Equity Fund's Dividend Yield and Growth
As of today, Voya Emerging Markets High Dividend Equity Fund currently has a 12-month trailing dividend yield of 12.78% and a 12-month forward dividend yield of 10.95%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Voya Emerging Markets High Dividend Equity Fund's annual dividend growth rate was -0.50%. Extended to a five-year horizon, this rate decreased to -0.70% per year.
Based on Voya Emerging Markets High Dividend Equity Fund's dividend yield and five-year growth rate, the 5-year yield on cost of Voya Emerging Markets High Dividend Equity Fund stock as of today is approximately 12.34%.
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 2023-02-28, Voya Emerging Markets High Dividend Equity Fund's dividend payout ratio is 0.00.
Voya Emerging Markets High Dividend Equity Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Voya Emerging Markets High Dividend Equity Fund's profitability 1 out of 10 as of 2023-02-28, suggesting the dividend may not be sustainable. The company has reported net profit in 2 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Voya Emerging Markets High Dividend Equity Fund's growth rank of 1 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Revenue is the lifeblood of any company, and Voya Emerging Markets High Dividend Equity Fund's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Voya Emerging Markets High Dividend Equity Fund's revenue has increased by approximately -17.10% per year on average, a rate that underperforms than approximately 74.72% of global competitors.
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, Voya Emerging Markets High Dividend Equity Fund's earnings increased by approximately -16.50% per year on average, a rate that underperforms than approximately 72.17% of global competitors.
Conclusion: Voya Emerging Markets High Dividend Equity Fund's Dividend Outlook
Given the company's past dividend performance, current yield and growth rate, and the payout ratio, the future of Voya Emerging Markets High Dividend Equity Fund's dividends remains uncertain. The company's profitability and growth metrics also cast doubts on its ability to sustain its dividends. Therefore, investors should approach with caution and conduct further research before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
