Gabelli Global Utility & Income Trust's Dividend Analysis
A Comprehensive Review of the Dividend Performance and Sustainability of Gabelli Global Utility & Income Trust (GLU)
Gabelli Global Utility & Income Trust (GLU) recently announced a dividend of $0.1 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 data from GuruFocus, let's delve into Gabelli Global Utility & Income Trust's dividend performance and assess its sustainability.
What Does Gabelli Global Utility & Income Trust Do?
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Gabelli Global Utility & Income Trust is a non-diversified, closed-end management investment company. The Fund's objective is to seek a consistent level of after-tax total return. It primarily invests in stocks of companies involved to a substantial extent in providing products, services, or equipment for the generation or distribution of electricity, gas, or water and infrastructure operations, and in equity securities including preferred securities of companies in other industries, in each case in such securities that are expected to pay periodic dividends.
A Glimpse at Gabelli Global Utility & Income Trust's Dividend History
Gabelli Global Utility & Income Trust has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Gabelli Global Utility & Income Trust's Dividend Yield and Growth
As of today, Gabelli Global Utility & Income Trust currently has a 12-month trailing dividend yield of 9.20% and a 12-month forward dividend yield of 9.20%. This suggests an expectation of same dividend payments over the next 12 months.
Extended to a five-year horizon, this rate increased to 1.30% per year. And over the past decade, Gabelli Global Utility & Income Trust's annual dividends per share growth rate stands at 0.10%. Based on Gabelli Global Utility & Income Trust's dividend yield and five-year growth rate, the 5-year yield on cost of Gabelli Global Utility & Income Trust stock as of today is approximately 9.81%.
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 Global Utility & Income Trust's dividend payout ratio is 2.07. This may suggest that the company's dividend may not be sustainable.
Gabelli Global Utility & Income Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Gabelli Global Utility & Income Trust'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 7 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 Global Utility & Income Trust'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 Gabelli Global Utility & Income Trust has a commendable dividend payment history, its current payout ratio, profitability rank, and growth metrics raise concerns about the sustainability of its dividend. Therefore, investors should exercise caution and conduct thorough research 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.
