Pioneer Diversified High Income Trust's Dividend Analysis
Understanding the Dividend Performance and Sustainability of Pioneer Diversified High Income Trust (HNW)
Pioneer Diversified High Income Trust(HNW) recently announced a dividend of $0.09 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-17. This announcement has stirred interest among investors, prompting a closer look at the company's dividend history, yield, and growth rates. Using data from GuruFocus, let's delve into Pioneer Diversified High Income Trust's dividend performance and assess its sustainability.
What Does Pioneer Diversified High Income Trust Do?
Pioneer Diversified High Income Trust is a diversified, closed-end management investment company. Its primary objective is to seek a high level of current income and capital appreciation. The company has investments spread across various sectors, including Health Care Technology, Household Durables, Oil, Gas and Consumable Fuels, Specialty Retail, Banks, Chemicals, Financial Services, and others. It also invests in convertible bonds, common stock, asset-backed securities, and the U.S Treasury.
A Glimpse at Pioneer Diversified High Income Trust's Dividend History
Pioneer Diversified High Income Trust has maintained a consistent dividend payment record since 2007, with dividends currently being distributed on a monthly basis. The chart below illustrates the company's annual Dividends Per Share for tracking historical trends.
Breaking Down Pioneer Diversified High Income Trust's Dividend Yield and Growth
Pioneer Diversified High Income Trust currently has a 12-month trailing dividend yield of 10.93% and a 12-month forward dividend yield of 10.74%, indicating an expected decrease in dividend payments over the next 12 months. Over the past three years, the company's annual dividend growth rate was 1.70%, which rose to 8.40% per year over a five-year period. However, over the past decade, the annual dividends per share growth rate stands at -4.80%. Based on these figures, the 5-year yield on cost of Pioneer Diversified High Income Trust stock as of today is approximately 16.36%.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of a dividend can be assessed by evaluating 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, ensuring the availability of funds for future growth and unexpected downturns. As of 2023-04-30, Pioneer Diversified High Income Trust's dividend payout ratio is 0.00. Furthermore, Pioneer Diversified High Income Trust's profitability rank of 3 out of 10, suggests that the dividend may not be sustainable. The company has reported net profit in 6 years out of the past 10 years.
Growth Metrics: The Future Outlook
For dividends to be sustainable, a company must exhibit robust growth metrics. Pioneer Diversified High Income Trust's growth rank of 3 out of 10 suggests that the company has poor growth prospects, and thus, the dividend may not be sustainable. However, Pioneer Diversified High Income Trust's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. The company's revenue has increased by approximately 36.40% per year on average, a rate that outperforms approximately 82.87% of global competitors. Furthermore, the company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Pioneer Diversified High Income Trust's earnings increased by approximately 35.30% per year on average, a rate that outperforms approximately 78.7% of global competitors.
Conclusion
Despite the impressive dividend yield and growth rates, Pioneer Diversified High Income Trust's low payout ratio and profitability rank raise questions about the sustainability of its dividends. The company's robust revenue model and impressive EPS growth rate are positive indicators. However, the poor growth rank suggests that the company may struggle to maintain its dividend payments in the long run. Therefore, investors should exercise caution and conduct further research before making investment decisions based on dividend performance alone. 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.
