High Income Securities Fund (PCF): A Comprehensive Analysis of its Dividend Performance
Exploring the Dividend History, Yield, Growth, and Sustainability of High Income Securities Fund (NYSE:PCF)
High Income Securities Fund (NYSE:PCF) recently announced a dividend of $0.06 per share, payable on October 31, 2023, with the ex-dividend date set for October 19, 2023. As investors anticipate this upcoming payment, the focus also shifts to the company's dividend history, yield, and growth rates. Let's delve into High Income Securities Fund's dividend performance and assess its sustainability using data from GuruFocus.
Understanding High Income Securities Fund
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High Income Securities Fund is a closed-end management investment company. Its primary objective is to provide high current income, with capital appreciation being a secondary goal. The Fund primarily invests in convertible bonds and convertible preferred stocks. It also significantly invests in high-yielding non-convertible securities with potential for capital appreciation.
Tracing High Income Securities Fund's Dividend History
The High Income Securities Fund has upheld a consistent dividend payment record since 1991. The dividends are currently distributed on a monthly basis. The chart below depicts the annual Dividends Per Share for tracking historical trends.
Dissecting High Income Securities Fund's Dividend Yield and Growth
As of today, High Income Securities Fund has a 12-month trailing dividend yield of 11.81% and a 12-month forward dividend yield of 11.05%. This suggests a decrease in dividend payments over the next 12 months.
Over the past three years, High Income Securities Fund's annual dividend growth rate was 110.20%. Extended to a five-year horizon, this rate decreased to 33.00% per year. As of today, the 5-year yield on cost of High Income Securities Fund stock is approximately 48.73%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
To gauge the sustainability of the dividend, one needs to examine the company's payout ratio. The dividend payout ratio reveals the portion of earnings that the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring funds for future growth and unexpected downturns. As of February 28, 2023, High Income Securities Fund's dividend payout ratio is 0.00.
High Income Securities Fund's profitability rank provides insights into the company's earnings prowess relative to its peers. As of February 28, 2023, GuruFocus ranks High Income Securities Fund's profitability 2 out of 10, suggesting that the dividend may not be sustainable. The company has reported net profit in 5 years out of the past 10 years.
Future Growth Prospects
For dividends to be sustainable, a company must demonstrate strong growth metrics. High Income Securities Fund's growth rank of 2 out of 10 suggests that the company has poor growth prospects, which may impact the sustainability of its dividend.
Concluding Remarks
While High Income Securities Fund has a commendable history of consistent dividend payments, the company's low growth and profitability ranks raise questions about the sustainability of future dividends. Investors should consider these factors when evaluating the potential for continued dividend payments. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
