Dynex Capital Inc's Dividend Analysis
An in-depth look at the dividend performance and sustainability of Dynex Capital Inc (NYSE:DX)
Dynex Capital Inc (NYSE:DX) recently announced a dividend of $0.13 per share, payable on 2023-11-01, with the ex-dividend date set for 2023-10-25. 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 delve into Dynex Capital Inc's dividend performance and assess its sustainability.
What Does Dynex Capital Inc Do?
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Dynex Capital Inc is a real estate investment trust. The company primarily invests in residential and commercial mortgage-backed securities. Its investments consist principally of Agency mortgage-backed securities including residential MBS and commercial MBS.
A Glimpse at Dynex Capital Inc's Dividend History
Dynex Capital Inc has maintained a consistent dividend payment record since 2008. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Dynex Capital Inc's Dividend Yield and Growth
As of today, Dynex Capital Inc currently has a 12-month trailing dividend yield of 15.12% and a 12-month forward dividend yield of 15.12%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Dynex Capital Inc's annual dividend growth rate was -8.10%. Extended to a five-year horizon, this rate increased to -7.70% per year. And over the past decade, Dynex Capital Inc's annual dividends per share growth rate stands at -8.40%.
Based on Dynex Capital Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Dynex Capital Inc stock as of today is approximately 10.13%.
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 2023-06-30, Dynex Capital Inc's dividend payout ratio is 0.00.
Dynex Capital Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Dynex Capital Inc's profitability 3 out of 10 as of 2023-06-30, suggesting the dividend may not be sustainable. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Dynex Capital Inc'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 Dynex Capital Inc has a history of consistent dividend payments, the negative dividend growth rate, coupled with a low profitability and growth rank, raises questions about the sustainability of its dividends in the long term. Investors should consider these factors carefully before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
