Deep Dive into the Dividend Performance and Sustainability of Eaton Vance Tax-mgd Dvsf Eq Inc Fd
Eaton Vance Tax-mgd Dvsf Eq Inc Fd (ETY, Financial) recently announced a dividend of $0.08 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-21. 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 Eaton Vance Tax-mgd Dvsf Eq Inc Fd's dividend performance and assess its sustainability.
Company Overview
Eaton Vance Tax-mgd Dvsf Eq Inc Fd is a diversified, closed-end management investment company. Its primary investment objective is to provide current income and gains. The secondary objective of the fund is capital appreciation. It invests in a diversified portfolio of domestic and foreign common stocks with an emphasis on dividend-paying stocks and writes S&P 500 Index call options with respect to a portion of the value of its common stock portfolio to generate current cash flow from the options premium received. Its portfolio of investments consists of capital markets, banks, internet and direct marketing retail, biotechnology, media, oil, gas, and consumable fuels, and other sectors.
Dividend History
Eaton Vance Tax-mgd Dvsf Eq Inc Fd has maintained a consistent dividend payment record since 2007. Dividends are currently distributed on a monthly basis.
Dividend Yield and Growth
As of today, Eaton Vance Tax-mgd Dvsf Eq Inc Fd currently has a 12-month trailing dividend yield of 8.32% and a 12-month forward dividend yield of 8.11%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Eaton Vance Tax-mgd Dvsf Eq Inc Fd's annual dividend growth rate was 3.30%. Extended to a five-year horizon, this rate decreased to 1.60% per year. Based on Eaton Vance Tax-mgd Dvsf Eq Inc Fd's dividend yield and five-year growth rate, the 5-year yield on cost of Eaton Vance Tax-mgd Dvsf Eq Inc Fd stock as of today is approximately 9.01%.
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 2023-04-30, Eaton Vance Tax-mgd Dvsf Eq Inc Fd's dividend payout ratio is 1.71. This may suggest that the company's dividend may not be sustainable.
Eaton Vance Tax-mgd Dvsf Eq Inc Fd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Eaton Vance Tax-mgd Dvsf Eq Inc Fd's profitability 2 out of 10 as of 2023-04-30, suggesting the dividend may not be sustainable. The company has reported net profit in 5 years out of past 10 years.
Future Growth Prospects
To ensure the sustainability of dividends, a company must have robust growth metrics. Eaton Vance Tax-mgd Dvsf Eq Inc Fd'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
While Eaton Vance Tax-mgd Dvsf Eq Inc Fd has a history of consistent dividend payments, its high payout ratio, 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.
