Barings Global Short Duration High Yield Fund (BGH): A Deep Dive into Dividend Performance and ...
An in-depth analysis of BGH's upcoming dividend, its history, yield, growth rates, and future prospects
Barings Global Short Duration High Yield Fund (NYSE:BGH) recently announced a dividend of $0.11 per share, payable on 2023-11-01, with the ex-dividend date set for 2023-10-20. 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 Barings Global Short Duration High Yield Fund's dividend performance and assess its sustainability.
Understanding Barings Global Short Duration High Yield Fund
Barings Global Short Duration High Yield Fund is a diversified, closed-end management investment company. Its investment objective is to seek as high a level of current income as the Adviser determines is consistent with capital preservation.
Barings Global Short Duration High Yield Fund's Dividend History
Barings Global Short Duration High Yield Fund has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Barings Global Short Duration High Yield Fund's Dividend Yield and Growth
As of today, Barings Global Short Duration High Yield Fund currently has a 12-month trailing dividend yield of 9.58% and a 12-month forward dividend yield of 9.58%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Barings Global Short Duration High Yield Fund's annual dividend growth rate was -10.70%. Extended to a five-year horizon, this rate increased to -8.60% per year. Based on Barings Global Short Duration High Yield Fund's dividend yield and five-year growth rate, the 5-year yield on cost of Barings Global Short Duration High Yield Fund stock as of today is approximately 6.11%.
Assessing Dividend Sustainability: 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 2023-06-30, Barings Global Short Duration High Yield Fund's dividend payout ratio is 0.89, which may suggest that the company's dividend may not be sustainable.
Barings Global Short Duration High Yield Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Barings Global Short Duration High Yield Fund's profitability 2 out of 10 as of 2023-06-30, suggesting that the dividend may not be sustainable. The company has reported net profit in 3 years out of past 10 years.
Growth Metrics and Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Barings Global Short Duration High Yield Fund's growth rank of 2 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Conclusion
While the high dividend yield of Barings Global Short Duration High Yield Fund may be attractive, the negative dividend growth rate, high payout ratio, and low profitability and growth ranks raise questions about the sustainability of its dividends. Investors should conduct thorough research and consider these factors 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.
