Gladstone Investment Corp's Dividend Analysis
A Deep Dive into the Dividend Performance and Sustainability of Gladstone Investment Corp
Gladstone Investment Corp (NASDAQ:GAIN) recently announced a dividend of $0.08 per share, payable on 2023-11-30, with the ex-dividend date set for 2023-11-17. 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 Gladstone Investment Corp's dividend performance and assess its sustainability.
About Gladstone Investment Corp
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Gladstone Investment Corp is a business development company. The company's investment objective is to invest achieve and grow current income by investing in debt securities of established businesses that will provide stable earnings and cash flow, and provide its stockholders with long-term capital appreciation by investing in equity securities. The company's investment sectors include Business service/distribution, Consumer products, and manufacturing. Its portfolio consists of the following industries Conglomerate Services, Home and Office Furnishings, Housewares, Durable Consumer Products, Leisure, Motion Pictures, Entertainment, Conglomerate Manufacturing, Chemicals, Telecommunications, Aerospace and Defense, and others. Its investment activities are carried across the United States.
Gladstone Investment Corp's Dividend History
Gladstone Investment Corp has maintained a consistent dividend payment record since 2005. Dividends are currently distributed on a monthly basis. Gladstone Investment Corp has increased its dividend each year since 2010. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 13 years.
Assessing Gladstone Investment Corp's Dividend Yield and Growth
As of today, Gladstone Investment Corp currently has a 12-month trailing dividend yield of 7.49% and a 12-month forward dividend yield of 7.49%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Gladstone Investment Corp's annual dividend growth rate was 4.20%. Extended to a five-year horizon, this rate decreased to 3.40% per year. And over the past decade, Gladstone Investment Corp's annual dividends per share growth rate stands at 3.70%.
Based on Gladstone Investment Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Gladstone Investment Corp stock as of today is approximately 8.85%.
Is Gladstone Investment Corp's Dividend Sustainable?
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, Gladstone Investment Corp's dividend payout ratio is 0.97. This may suggest that the company's dividend may not be sustainable.
Gladstone Investment Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Gladstone Investment Corp's profitability 4 out of 10 as of 2023-06-30, suggesting the dividend may not be sustainable. The company has reported net profit in 8 years out of past 10 years.
Gladstone Investment Corp's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Gladstone Investment Corp's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Revenue is the lifeblood of any company, and Gladstone Investment Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Gladstone Investment Corp's revenue has increased by approximately 59.00% per year on average, a rate that outperforms than approximately 89.45% of global competitors.
Conclusion
In conclusion, while Gladstone Investment Corp has a commendable history of consistent and increasing dividend payments, the company's high payout ratio and average profitability rank raise questions about the sustainability of its dividends. Furthermore, the company's growth metrics suggest limited growth potential. Therefore, investors should closely monitor these factors before making a decision. 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.
