Flaherty & Crumrine Preferred and Income Securities Fund Incorporated's Dividend Analysis
A Comprehensive Look at FFC's Dividend Performance and Sustainability
Flaherty & Crumrine Preferred and Income Securities Fund Incorporated(NYSE:FFC) recently announced a dividend of $0.08 per share, payable on 2023-11-30, with the ex-dividend date set for 2023-11-21. 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 Flaherty & Crumrine Preferred and Income Securities Fund Incorporated's dividend performance and assess its sustainability.
Understanding Flaherty & Crumrine Preferred and Income Securities Fund Incorporated
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Flaherty & Crumrine Preferred and Income Securities Fund Incorporated is a diversified, closed-end management investment company. The fund's investment objective is to provide its common shareholders with high current income consistent with the preservation of capital. It invests primarily in a diversified portfolio of preferred securities.
Flaherty & Crumrine Preferred and Income Securities Fund Incorporated's Dividend History
Flaherty & Crumrine Preferred and Income Securities Fund Incorporated has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Flaherty & Crumrine Preferred and Income Securities Fund Incorporated's Dividend Yield and Growth
As of today, Flaherty & Crumrine Preferred and Income Securities Fund Incorporated currently has a 12-month trailing dividend yield of 9.21% and a 12-month forward dividend yield of 8.90%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Flaherty & Crumrine Preferred and Income Securities Fund Incorporated's annual dividend growth rate was 1.20%. Based on Flaherty & Crumrine Preferred and Income Securities Fund Incorporated's dividend yield and five-year growth rate, the 5-year yield on cost of Flaherty & Crumrine Preferred and Income Securities Fund Incorporated stock as of today is approximately 9.21%.
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 2023-05-31, Flaherty & Crumrine Preferred and Income Securities Fund Incorporated's dividend payout ratio is 0.00.
Flaherty & Crumrine Preferred and Income Securities Fund Incorporated's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Flaherty & Crumrine Preferred and Income Securities Fund Incorporated's profitability 2 out of 10 as of 2023-05-31, suggesting the dividend may not be sustainable. The company has reported net profit in 4 years out of past 10 years.
Assessing Future Dividend Sustainability: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Flaherty & Crumrine Preferred and Income Securities Fund Incorporated'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
Considering Flaherty & Crumrine Preferred and Income Securities Fund Incorporated's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, investors should exercise caution. The company's low profitability and growth ranks, combined with a zero payout ratio, suggest potential risks to the sustainability of its dividends. Thus, it is essential for investors to closely monitor these metrics to make informed decisions.
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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.
