Gabelli Dividend & Income Trust's Dividend Analysis
An in-depth review of the company's dividend performance and sustainability
Gabelli Dividend & Income Trust (NYSE:GDV) recently announced a dividend of $0.11 per share, payable on 2023-11-22, with the ex-dividend date set for 2023-11-14. 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 Gabelli Dividend & Income Trust's dividend performance and assess its sustainability.
What Does Gabelli Dividend & Income Trust Do?
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Gabelli Dividend & Income Trust operates as a diversified closed-end management investment company. The fund's investment objective is to provide a high level of total return on its assets with an emphasis on dividends and income. To achieve its objective, the fund may invest 80% of its assets in dividend-paying securities or other income-producing securities. The fund invests in various sectors, in which Financial Services, Food & Beverage, Health Care, Consumer Products, Electronics and Computer Software & Services accounts for the majority weightage.
A Glimpse at Gabelli Dividend & Income Trust's Dividend History
Gabelli Dividend & Income Trust has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Gabelli Dividend & Income Trust's Dividend Yield and Growth
As of today, Gabelli Dividend & Income Trust currently has a 12-month trailing dividend yield of 6.83% and a 12-month forward dividend yield of 6.83%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Gabelli Dividend & Income Trust's annual dividend growth rate was 0.10%. Based on Gabelli Dividend & Income Trust's dividend yield and five-year growth rate, the 5-year yield on cost of Gabelli Dividend & Income Trust stock as of today is approximately 6.83%.
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, Gabelli Dividend & Income Trust's dividend payout ratio is 0.41.
Gabelli Dividend & Income Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Gabelli Dividend & Income Trust's profitability 2 out of 10 as of 2023-06-30, suggesting the dividend may not be sustainable. The company has reported net profit in 4 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Gabelli Dividend & Income Trust'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 Gabelli Dividend & Income Trust's consistent dividend payments, moderate growth rate, and satisfactory payout ratio, it appears that the company has managed its dividends effectively. However, its low profitability and growth ranks raise concerns about the sustainability of its dividends in the long run. Investors should 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.
