Deep Dive into Pioneer Diversified High Income Trust's Dividend Performance
An in-depth analysis of HNW's dividend history, yield, growth, and sustainability
Pioneer Diversified High Income Trust (HNW) recently announced a dividend of $0.09 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-19. 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 Pioneer Diversified High Income Trusts dividend performance and assess its sustainability.
What Does Pioneer Diversified High Income Trust Do?
Pioneer Diversified High Income Trust is a diversified, closed-end management investment company. Its investment objective is to seek a high level of current income as well as capital appreciation. The company invests in various sectors such as Health Care Technology, Household Durables, Oil, Gas and Consumable Fuels, Specialty Retail, Banks, Chemicals, Financial Services, and others. It also invests in convertible bonds, common stock, asset-backed securities, and the U.S Treasury.
A Glimpse at Pioneer Diversified High Income Trust's Dividend History
Pioneer Diversified High Income Trust has maintained a consistent dividend payment record since 2007. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Pioneer Diversified High Income Trust's Dividend Yield and Growth
As of today, Pioneer Diversified High Income Trust currently has a 12-month trailing dividend yield of 10.90% and a 12-month forward dividend yield of 10.51%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Pioneer Diversified High Income Trust's annual dividend growth rate was 1.70%. Extended to a five-year horizon, this rate increased to 8.40% per year. And over the past decade, Pioneer Diversified High Income Trust's annual dividends per share growth rate stands at -4.80%.
Based on Pioneer Diversified High Income Trust's dividend yield and five-year growth rate, the 5-year yield on cost of Pioneer Diversified High Income Trust stock as of today is approximately 16.16%.
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 2023-04-30, Pioneer Diversified High Income Trust's dividend payout ratio is 0.00.
Pioneer Diversified High Income Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Pioneer Diversified High Income Trust's profitability 3 out of 10 as of 2023-04-30, suggesting the dividend may not be sustainable. The company has reported net profit in 6 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Pioneer Diversified High Income Trust's growth rank of 3 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 Pioneer Diversified High Income Trust's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Pioneer Diversified High Income Trust's revenue has increased by approximately 36.40% per year on average, a rate that outperforms than approximately 82.7% 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, Pioneer Diversified High Income Trust's earnings increased by approximately 35.30% per year on average, a rate that outperforms than approximately 77.78% of global competitors.
Next Steps
In conclusion, Pioneer Diversified High Income Trust's consistent dividend payments, decent growth rate, and strong revenue model make it an interesting prospect for income-focused investors. However, its low profitability and growth ranks, combined with a payout ratio of 0.00, raise questions about the sustainability of its dividend in the long run. Therefore, investors should carefully 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.
