Unveiling Voya Global Equity Dividend and Premium Opportunity Fund's Dividend Profile
A Comprehensive Analysis of the Fund's Dividend Performance and Sustainability
Voya Global Equity Dividend and Premium Opportunity Fund (NYSE:IGD) recently announced a dividend of $0.04 per share, payable on 2023-10-16, with the ex-dividend date set for 2023-10-02. 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 Voya Global Equity Dividend and Premium Opportunity Fund's dividend performance and assess its sustainability.
Understanding Voya Global Equity Dividend and Premium Opportunity Fund
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Voya Global Equity Dividend and Premium Opportunity Fund is a United States-based diversified, closed-end Fund. The primary objective of the Fund is to seek to provide investors with a high level of income from a portfolio of global common stocks with historically attractive dividend yields and premiums from call option writing. Its secondary investment objective is capital appreciation. Under normal market conditions, the Fund will invest at least 80% of its managed assets in a portfolio of common stocks of dividend-paying companies located throughout the world.
Voya Global Equity Dividend and Premium Opportunity Fund's Dividend History
Voya Global Equity Dividend and Premium Opportunity Fund has maintained a consistent dividend payment record since 2005. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dividend Yield and Growth of Voya Global Equity Dividend and Premium Opportunity Fund
As of today, Voya Global Equity Dividend and Premium Opportunity Fund currently has a 12-month trailing dividend yield of 9.80% and a 12-month forward dividend yield of 9.80%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Voya Global Equity Dividend and Premium Opportunity Fund's annual dividend growth rate was -7.50%. Extended to a five-year horizon, this rate decreased to -9.80% per year.
Based on Voya Global Equity Dividend and Premium Opportunity Fund's dividend yield and five-year growth rate, the 5-year yield on cost of Voya Global Equity Dividend and Premium Opportunity Fund stock as of today is approximately 5.85%.
Evaluating Voya Global Equity Dividend and Premium Opportunity Fund's Dividend Sustainability
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 2023-02-28, Voya Global Equity Dividend and Premium Opportunity Fund's dividend payout ratio is 5.33. This may suggest that the company's dividend may not be sustainable.
Voya Global Equity Dividend and Premium Opportunity Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Voya Global Equity Dividend and Premium Opportunity Fund's profitability 2 out of 10 as of 2023-02-28, suggesting the dividend may not be sustainable. The company has reported net profit in 4 years out of past 10 years.
Analysing Voya Global Equity Dividend and Premium Opportunity Fund's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Voya Global Equity Dividend and Premium Opportunity 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
Considering Voya Global Equity Dividend and Premium Opportunity Fund's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, it is clear that investors need to be cautious. The fund's low profitability and growth ranks, along with a high payout ratio, raise questions about the sustainability of its dividends. Therefore, it's crucial to keep an eye on these metrics while making investment decisions.
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This article first appeared on GuruFocus.
