Unraveling the Dividend Story of Dynex Capital Inc
An In-depth Look at the Dividend Performance and Sustainability of Dynex Capital Inc (NYSE:DX)
Dynex Capital Inc(NYSE:DX) has recently announced a dividend of $0.13 per share, payable on 2023-10-02, with the ex-dividend date set for 2023-09-21. As investors eagerly anticipate this forthcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Using the data from GuruFocus, we delve into Dynex Capital Inc's dividend performance and evaluate its sustainability.
Overview of Dynex Capital Inc
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Dynex Capital Inc is a real estate investment trust that predominantly invests in residential and commercial mortgage-backed securities. Its investment portfolio mainly comprises Agency mortgage-backed securities, including residential MBS and commercial MBS.
Tracing Dynex Capital Inc's Dividend History
Dynex Capital Inc has upheld a consistent dividend payment record since 2008, with dividends currently distributed on a monthly basis. The chart below displays annual Dividends Per Share for tracking historical trends.
Dissecting Dynex Capital Inc's Dividend Yield and Growth
As of today, Dynex Capital Inc boasts a 12-month trailing dividend yield of 12.05% and a 12-month forward dividend yield of 12.05%, indicating an expectation of identical dividend payments over the next 12 months.
In the past three years, Dynex Capital Inc's annual dividend growth rate was -8.10%. When extended to a five-year horizon, this rate increased to -7.70% per year. Over the past decade, Dynex Capital Inc's annual dividends per share growth rate stands at -8.40%.
Based on Dynex Capital Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Dynex Capital Inc stock as of today is approximately 8.07%.
Is Dynex Capital Inc's Dividend Sustainable?
To determine the sustainability of the dividend, it's vital to examine 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 2023-06-30, Dynex Capital Inc's dividend payout ratio is 0.00.
Dynex Capital Inc's profitability rank, as of 2023-06-30, is 3 out of 10, suggesting the dividend may not be sustainable. The company has reported net profit in 9 years out of the past 10 years.
Future Growth Prospects of Dynex Capital Inc
For dividends to be sustainable, a company must exhibit robust growth metrics. Dynex Capital Inc's growth rank of 3 out of 10 suggests that the company has poor growth prospects, thus, the dividend may not be sustainable.
Final Thoughts
While Dynex Capital Inc's dividend yield is impressive, the negative growth rates and low profitability and growth ranks raise concerns about the sustainability of its dividends. 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.
