Invesco Value Municipal Income Trust's Dividend Analysis
Understanding the Dividend Dynamics of Invesco Value Municipal Income Trust (NYSE:IIM)
Invesco Value Municipal Income Trust (NYSE:IIM) recently announced a dividend of $0.04 per share, payable on 2024-01-31, with the ex-dividend date set for 2024-01-16. 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 Invesco Value Municipal Income Trust's dividend performance and assess its sustainability.
What Does Invesco Value Municipal Income Trust Do?
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Invesco Value Municipal Income Trust is a diversified, closed-end management investment company. Its investment objective is to provide common shareholders with current income which is exempt from federal income tax.
A Glimpse at Invesco Value Municipal Income Trust's Dividend History
Invesco Value Municipal Income Trust has maintained a consistent dividend payment record since 1993. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Invesco Value Municipal Income Trust's Dividend Yield and Growth
As of today, Invesco Value Municipal Income Trust currently has a 12-month trailing dividend yield of 4.70% and a 12-month forward dividend yield of 4.50%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Invesco Value Municipal Income Trust's annual dividend growth rate was -1.80%. Extended to a five-year horizon, this rate increased to -1.10% per year. Based on Invesco Value Municipal Income Trust's dividend yield and five-year growth rate, the 5-year yield on cost of Invesco Value Municipal Income Trust stock as of today is approximately 4.45%.
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 2023-08-31, Invesco Value Municipal Income Trust's dividend payout ratio is 28.83, which may suggest that the company's dividend may not be sustainable.
Invesco Value Municipal Income Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Invesco Value Municipal Income Trust's profitability 2 out of 10 as of 2023-08-31, suggesting the dividend may not be sustainable. The company has reported net profit in 4 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Invesco Value Municipal 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.
Next Steps
In conclusion, while Invesco Value Municipal Income Trust has a long history of dividend payments, the recent trends in dividend yield and growth rates, coupled with its payout ratio, profitability rank, and growth prospects, raise questions about the sustainability of its dividends. As value investors consider the implications of these factors on their investment decisions, it is crucial to monitor the company's financial health and market conditions closely. Will Invesco Value Municipal Income Trust manage to maintain its dividend in the face of these challenges, or will investors need to adjust their expectations? For those seeking to expand their portfolio with high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener for informed investing.
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.
