GAMCO Global Gold Natural Resources & Income Trust's Dividend Analysis
Assessing the Sustainability of GGN's Dividend Payments
GAMCO Global Gold Natural Resources & Income Trust (GGN) recently announced a dividend of $0.03 per share, payable on 2024-02-22, with the ex-dividend date set for 2024-02-13. 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 GAMCO Global Gold Natural Resources & Income Trust's dividend performance and assess its sustainability.
Understanding GAMCO Global Gold Natural Resources & Income Trust
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GAMCO Global Gold Natural Resources & Income Trust is a non-diversified closed-end management investment company. Its primary investment objective is to provide a high current income and capital appreciation as its secondary objective. To achieve its objective, the fund may invest 80% of its assets in equity securities of companies principally engaged in the gold and natural resources industries. It also intends to earn income through an option strategy of writing (selling) covered call options on equity securities in its portfolio.
GAMCO Global Gold Natural Resources & Income Trust's Dividend Track Record
GAMCO Global Gold Natural Resources & Income Trust has maintained a consistent dividend payment record since 2005, with dividends currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Analyzing Dividend Yield and Growth Rates
As of today, GAMCO Global Gold Natural Resources & Income Trust currently has a 12-month trailing dividend yield of 9.60% and a 12-month forward dividend yield of 9.60%, suggesting an expectation of consistent dividend payments over the next 12 months. Over the past three years, GAMCO Global Gold Natural Resources & Income Trust's annual dividend growth rate was -15.70%. This rate increased to 14.20% per year over a five-year horizon. However, over the past decade, the annual dividends per share growth rate stands at -13.80%. Based on the dividend yield and five-year growth rate, the 5-year yield on cost of GAMCO Global Gold Natural Resources & Income Trust stock as of today is approximately 18.65%.
Evaluating 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. As of 2023-06-30, GAMCO Global Gold Natural Resources & Income Trust's dividend payout ratio is 0.51, indicating that the company retains almost half of its earnings for growth and unexpected downturns. However, the profitability rank of 3 out of 10, as of the same date, suggests that the dividend may face sustainability challenges, given that the company has reported net profit in only 6 out of the past 10 years.
Growth Prospects and Revenue Trends
For dividends to be sustainable, a company must demonstrate strong growth metrics. Unfortunately, GAMCO Global Gold Natural Resources & Income Trust's growth rank of 3 out of 10 indicates poor growth prospects. Additionally, the company's revenue per share and 3-year revenue growth rate show a decrease by approximately -21.40% per year on average, underperforming approximately 80.32% of global competitors. The 3-year EPS growth rate also reflects a concerning trend, with earnings decreasing by approximately -22.80% per year on average, underperforming 77.91% of global competitors.
Concluding Insights on GAMCO Global Gold Natural Resources & Income Trust's Dividend Outlook
In conclusion, while GAMCO Global Gold Natural Resources & Income Trust offers a high dividend yield, the declining growth rates, and challenging profitability metrics raise questions about the long-term sustainability of its dividends. Investors should weigh these factors carefully against their investment strategies and risk tolerance. For those seeking high-dividend yield stocks with potentially more stable outlooks, GuruFocus Premium users can utilize the High Dividend Yield Screener to explore alternative opportunities.
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.
