Pioneer Floating Rate Trust's Dividend Analysis
An In-depth Look into PHD's Dividend Performance and Sustainability
Pioneer Floating Rate Trust (NYSE:PHD) recently announced a dividend of $0.09 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-17. As investors anticipate this forthcoming payment, the spotlight is also cast on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's dive into Pioneer Floating Rate Trust's dividend performance and assess its sustainability.
Understanding Pioneer Floating Rate Trust's Business
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Pioneer Floating Rate Trust is a diversified fund, primarily investing in floating-rate loans. It aims to provide a high level of current income and seeks the preservation of capital.
Pioneer Floating Rate Trust's Dividend History
Since 2005, Pioneer Floating Rate Trust has maintained a consistent dividend payment record, with dividends currently distributed on a monthly basis. The chart below shows the annual Dividends Per Share for tracking historical trends.
Pioneer Floating Rate Trust's Dividend Yield and Growth
As of today, Pioneer Floating Rate Trust has a 12-month trailing dividend yield of 11.63% and a 12-month forward dividend yield of 12.42%. This suggests an expectation of increased dividend payments over the next 12 months. Pioneer Floating Rate Trust's dividend yield outperforms 86.38% of global competitors in the Asset Management industry, making it an attractive proposition for income investors.
In the past three years, Pioneer Floating Rate Trust's annual dividend growth rate was -2.20%, which increased to -1.50% per year over a five-year horizon. The 5-year yield on cost of Pioneer Floating Rate Trust stock is approximately 10.78% as of today.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The dividend payout ratio of Pioneer Floating Rate Trust, which stands at 8.39 as of 2023-05-31, 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. However, this may suggest that the company's dividend may not be sustainable.
Pioneer Floating Rate Trust's profitability rank, as of 2023-05-31, is 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 Prospects: Growth Metrics
Pioneer Floating Rate 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.
Conclusion
While Pioneer Floating Rate Trust has a commendable dividend history and attractive yield, the company's negative dividend growth rate, low payout ratio, and poor growth prospects raise questions about the sustainability of its dividends. Therefore, investors should exercise caution and conduct thorough research before making investment decisions. 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.
