Unraveling Doubleline Opportunistic Credit Fund's Dividend Performance and Sustainability
A comprehensive analysis of the dividend history, yield, growth, and payout metrics of Doubleline Opportunistic Credit Fund (NYSE:DBL)
Doubleline Opportunistic Credit Fund (NYSE:DBL) recently announced a dividend of $0.11 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-13. 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 deep dive into Doubleline Opportunistic Credit Funds dividend performance and assess its sustainability.
Understanding Doubleline Opportunistic Credit Fund's Operations
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Doubleline Opportunistic Credit Fund operates as a closed-end management investment company. Its investment objective is to seek a high total investment return by providing a high level of current income and the potential for capital appreciation. The Fund invests in debt securities, residential and commercial mortgage-backed securities, asset-backed securities, U.S. Government securities, corporate debt, international sovereign debt, and short-term investments.
Examining Doubleline Opportunistic Credit Fund's Dividend History
Doubleline Opportunistic Credit Fund has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Deciphering Doubleline Opportunistic Credit Fund's Dividend Yield and Growth
As of today, Doubleline Opportunistic Credit Fund currently has a 12-month trailing dividend yield of 9.16% and a 12-month forward dividend yield of 9.16%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Doubleline Opportunistic Credit Fund's annual dividend growth rate was -1.40%. Extended to a five-year horizon, this rate decreased to -9.20% per year. Based on Doubleline Opportunistic Credit Fund's dividend yield and five-year growth rate, the 5-year yield on cost of Doubleline Opportunistic Credit Fund stock as of today is approximately 5.65%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
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 2023-03-31, Doubleline Opportunistic Credit Fund's dividend payout ratio is 0.00.
Doubleline Opportunistic Credit Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Doubleline Opportunistic Credit Fund's profitability 2 out of 10 as of 2023-03-31, suggesting the dividend may not be sustainable. The company has reported net profit in 4 years out of past 10 years.
Growth Metrics and the Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Doubleline Opportunistic Credit Fund'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
In summary, while Doubleline Opportunistic Credit Fund has a consistent dividend payment record, the negative dividend growth rate, low profitability rank, and poor growth prospects 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.
