Unraveling Invesco Mortgage Capital Inc's Dividend Performance and Sustainability
A Comprehensive Analysis of the Company's Dividend History, Yield, Growth, and Future Prospects
Invesco Mortgage Capital Inc (NYSE:IVR) recently announced a dividend of $0.4 per share, payable on 2023-10-27, with the ex-dividend date set for 2023-10-05. 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 Invesco Mortgage Capital Inc's dividend performance and assess its sustainability.
Company Overview
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Invesco Mortgage Capital Inc is a REIT that invests, finances, and manages residential and commercial mortgage-backed securities and mortgage loans. The company's portfolio consists of various securities that are guaranteed by a U.S. government agency or a federally chartered corporation; and other real estate-related financing arrangements.
Dividend History
Invesco Mortgage Capital Inc has maintained a consistent dividend payment record since 2009, with dividends currently distributed on a quarterly basis. The chart below provides a glimpse into the company's annual Dividends Per Share for tracking historical trends.
Dividend Yield and Growth
As of today, Invesco Mortgage Capital Inc currently has a 12-month trailing dividend yield of 23.18% and a 12-month forward dividend yield of 17.69%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Invesco Mortgage Capital Inc's annual dividend growth rate was -40.00%. Extended to a five-year horizon, this rate increased to -30.80% per year. And over the past decade, Invesco Mortgage Capital Inc's annual dividends per share growth rate stands at -16.90%.
Based on Invesco Mortgage Capital Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Invesco Mortgage Capital Inc stock as of today is approximately 3.68%.
Dividend Sustainability Analysis
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 2023-06-30, Invesco Mortgage Capital Inc's dividend payout ratio is 0.00.
Invesco Mortgage Capital Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Invesco Mortgage Capital Inc's profitability 2 out of 10 as of 2023-06-30, suggesting the dividend may not be sustainable. The company has reported net profit in 5 years out of past 10 years.
Growth Metrics and Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Invesco Mortgage Capital Inc'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 conclusion, Invesco Mortgage Capital Inc's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics paint a complex picture. While the company has a consistent dividend payment record and a high dividend yield, the negative growth rates and low profitability and growth ranks indicate potential challenges to dividend sustainability. Investors should consider these factors carefully 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.
