Unraveling the Dividend Dynamics of Eaton Vance Enhanced Equity Income Fund II
Delving into the Dividend Performance, Payout Ratio, and Growth Metrics of EOS
Eaton Vance Enhanced Equity Income Fund II (NYSE:EOS) has recently announced a dividend of $0.12 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-21. As investors eagerly anticipate this forthcoming payment, it's also a fitting time to examine the company's dividend history, yield, and growth rates. Utilizing data from GuruFocus, let's dive into Eaton Vance Enhanced Equity Income Fund II's dividend performance and assess its sustainability.
About Eaton Vance Enhanced Equity Income Fund II
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Eaton Vance Enhanced Equity Income Fund II is a diversified, closed-end management investment company. The fund's primary investment objective is to provide current income, with a secondary objective of capital appreciation. It invests in a portfolio of large and mid-cap securities in sectors such as Information Technology, Consumer Discretionary, Communication Services, Healthcare, Industrials, Consumer Staples, Financials, Materials, and Energy.
A Look at Eaton Vance Enhanced Equity Income Fund II's Dividend History
Eaton Vance Enhanced Equity Income Fund II has maintained a consistent dividend payment record since 2005, with dividends currently distributed on a monthly basis. The chart below provides a historical view of the annual Dividends Per Share.
Understanding Eaton Vance Enhanced Equity Income Fund II's Dividend Yield and Growth
As of today, Eaton Vance Enhanced Equity Income Fund II has a 12-month trailing dividend yield of 8.15% and a 12-month forward dividend yield of 7.91%. This indicates a potential decrease in dividend payments over the next 12 months. Over the past three years, the fund's annual dividend growth rate was 7.70%. This rate increased to 8.20% per year when extended to a five-year horizon. Consequently, the 5-year yield on cost of Eaton Vance Enhanced Equity Income Fund II stock as of today is approximately 12.09%.
Is Eaton Vance Enhanced Equity Income Fund II's Dividend Sustainable?
The sustainability of a dividend can be gauged by examining the company's payout ratio. The dividend payout ratio reveals the proportion of earnings distributed as dividends. A lower ratio suggests that the company retains a significant portion of its earnings, ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Eaton Vance Enhanced Equity Income Fund II's dividend payout ratio is 0.42.
Another critical factor is Eaton Vance Enhanced Equity Income Fund II's profitability rank. As of 2023-06-30, the fund's profitability ranks 3 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.
Assessing Growth Metrics for Future Outlook
Robust growth metrics are essential for the sustainability of dividends. Eaton Vance Enhanced Equity Income Fund II's growth rank of 3 out of 10 suggests that the company has poor growth prospects, which could impact the sustainability of its dividend.
Conclusion
While Eaton Vance Enhanced Equity Income Fund II has a history of consistent dividend payments and a decent growth rate, its low profitability and growth ranks raise questions about the sustainability of its dividend in the long run. Investors should consider these factors before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
