A Comprehensive Review of Dividend History, Growth, Yield, and Future Prospects
Mfs High Income Municipal Trust (CXE, Financial) recently announced a dividend of $0.01 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-12. 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 Mfs High Income Municipal Trusts dividend performance and assess its sustainability.
Understanding Mfs High Income Municipal Trust's Business Model
Mfs High Income Municipal Trust is a United States-based diversified closed-end management investment company. Its investment objective is to seek high current income exempt from federal income tax. The fund invests a majority of its net assets, including assets attributable to preferred shares and borrowings for investment purposes, in tax-exempt bonds and tax-exempt notes.
Tracing Mfs High Income Municipal Trust's Dividend History
Mfs High Income Municipal Trust has maintained a consistent dividend payment record since 1989. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Examining Mfs High Income Municipal Trust's Dividend Yield and Growth
As of today, Mfs High Income Municipal Trust currently has a 12-month trailing dividend yield of 5.01% and a 12-month forward dividend yield of 4.93%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Mfs High Income Municipal Trust's annual dividend growth rate was -7.90%. Extended to a five-year horizon, this rate increased to -7.10% per year. Based on Mfs High Income Municipal Trust's dividend yield and five-year growth rate, the 5-year yield on cost of Mfs High Income Municipal Trust stock as of today is approximately 3.47%.
Assessing the Sustainability of Mfs High Income Municipal Trust's Dividend
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 2023-05-31, Mfs High Income Municipal Trust's dividend payout ratio is 0.00.
Mfs High Income Municipal Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Mfs High Income Municipal Trust's profitability 3 out of 10 as of 2023-05-31, suggesting the dividend may not be sustainable. The company has reported net profit in 5 years out of past 10 years.
Looking at Mfs High Income Municipal Trust's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Mfs High Income Municipal Trust's growth rank of 3 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Concluding Remarks
In conclusion, while Mfs High Income Municipal Trust has a commendable dividend history, its current dividend yield and growth rate, combined with a low payout ratio and profitability rank, raise questions about the sustainability of its dividends. With a growth rank suggesting poor future prospects, investors should exercise caution and conduct further research before making investment decisions.
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