MFS Intermediate Income Trust's Dividend Analysis
An Examination of MIN's Dividend Performance and Sustainability
MFS Intermediate Income Trust (NYSE:MIN) recently announced a dividend of $0.02 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-17. 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 delve into MFS Intermediate Income Trust's dividend performance and assess its sustainability.
Understanding MFS Intermediate Income Trust
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MFS Intermediate Income Trust is a diversified closed-end management investment company. The fund's investment objective is to seek high current income but may also consider capital appreciation. It invests the assets primarily in debt instruments. Its portfolio of investments comprises of different sector investments such as the automotive, chemicals, energy, food and beverages, insurance, and other sectors.
A Look into MFS Intermediate Income Trust's Dividend History
MFS Intermediate Income Trust has maintained a consistent dividend payment record since 1988. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dissecting MFS Intermediate Income Trust's Dividend Yield and Growth
As of today, MFS Intermediate Income Trust currently has a 12-month trailing dividend yield of 9.57% and a 12-month forward dividend yield of 9.52%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, MFS Intermediate Income Trust's annual dividend growth rate was -6.40%. Extended to a five-year horizon, this rate increased to -5.40% per year. Based on MFS Intermediate Income Trust's dividend yield and five-year growth rate, the 5-year yield on cost of MFS Intermediate Income Trust stock as of today is approximately 7.25%.
Is MFS Intermediate Income Trust'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 2023-04-30, MFS Intermediate Income Trust's dividend payout ratio is 6.55, suggesting that the company's dividend may not be sustainable.
MFS Intermediate Income Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks MFS Intermediate Income Trust's profitability 2 out of 10 as of 2023-04-30, suggesting the dividend may not be sustainable. The company has reported net profit in 4 years out of past 10 years.
The Future Outlook for MFS Intermediate Income Trust's Dividend
To ensure the sustainability of dividends, a company must have robust growth metrics. MFS Intermediate 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.
Final Thoughts
In conclusion, while MFS Intermediate Income Trust has a long history of consistent dividend payments, its current growth rate, payout ratio, and profitability rank raise questions about the sustainability of its dividends in the long run. Investors considering this stock for its dividends should take these factors into account and monitor the company's performance closely.
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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.
