DoubleLine Income Solutions Fund's Dividend Analysis
Exploring the Dividend Sustainability of DoubleLine Income Solutions Fund (NYSE:DSL)
DoubleLine Income Solutions Fund (NYSE:DSL) recently announced a dividend of $0.11 per share, payable on 2024-01-31, with the ex-dividend date set for 2024-01-17. 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 DoubleLine Income Solutions Fund's dividend performance and assess its sustainability.
What Does DoubleLine Income Solutions Fund Do?
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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.
A Glimpse at 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.
Breaking Down 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 10.56% and a 12-month forward dividend yield of 10.56%. 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 -7.60% 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 7.11%.
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 2023-09-30, DoubleLine Income Solutions Fund's dividend payout ratio is 1.28, which may suggest that the company's dividend may not be sustainable.
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 3 out of 10 as of 2023-09-30, suggesting the dividend may not be sustainable. The company has reported net profit in 5 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. DoubleLine Income Solutions Fund's growth rank of 3 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Next Steps
In conclusion, while DoubleLine Income Solutions Fund offers an attractive dividend yield, the fund's negative dividend growth rate, high payout ratio, low profitability, and poor growth rank raise concerns about the sustainability of its dividends. Investors should consider these factors carefully when evaluating the fund as a potential income investment. For those looking to expand their portfolio with high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener for more options.
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.
