DoubleLine Income Solutions Fund (DSL): A Deep Dive into Its Dividend Performance and Sustainability
Unraveling the Dividend Story of DoubleLine Income Solutions Fund
DoubleLine Income Solutions Fund (NYSE:DSL) recently announced a dividend of $0.11 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-13. 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 DoubleLine Income Solutions Funds dividend performance and assess its sustainability.
Understanding DoubleLine Income Solutions Fund
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DoubleLine Income Solutions Fund is a closed-end fund. The fund's primary investment objective is to seek high income and its secondary objective is to seek capital appreciation. It invests in securities, including money market funds, foreign corporate bonds, US corporate bonds, bank loans, collateralized loan obligations, and municipal bonds. The portfolio of the fund consists of various industries such as Healthcare, Technology, Construction, Automotive, Insurance, Beverage, Pharmaceuticals, Leisure, and others.
Tracing DoubleLine Income Solutions Fund's Dividend History
DoubleLine Income Solutions Fund has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Analyzing DoubleLine Income Solutions Fund's Dividend Yield and Growth
As of today, DoubleLine Income Solutions Fund currently has a 12-month trailing dividend yield of 10.93% and a 12-month forward dividend yield of 10.93%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, DoubleLine Income Solutions Fund's annual dividend growth rate was -9.80%. Extended to a five-year horizon, this rate increased to -6.60% per year. Based on DoubleLine Income Solutions Fund's dividend yield and five-year growth rate, the 5-year yield on cost of DoubleLine Income Solutions Fund stock as of today is approximately 7.77%.
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 2023-03-31, DoubleLine Income Solutions Fund's dividend payout ratio is 0.00.
DoubleLine Income Solutions Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks DoubleLine Income Solutions Fund's profitability 2 out of 10 as of 2023-03-31, suggesting the dividend may not be sustainable. The company has reported net profit in 4 years out of past 10 years.
Peering into the Future: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. DoubleLine Income Solutions 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.
Wrapping Up
While DoubleLine Income Solutions Fund has a commendable dividend history, its current payout ratio, profitability rank, and growth metrics raise questions about the sustainability of its dividends. Investors should consider these factors carefully before making investment decisions. For those seeking high-dividend yield stocks, GuruFocus Premium users can take advantage of the High Dividend Yield Screener.
This article first appeared on GuruFocus.
