A Comprehensive Look at Mfs High Income Municipal Trust's Dividend Performance and Sustainability
Mfs High Income Municipal Trust(CXE, Financial) recently announced a dividend of $0.01 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-17. 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 look into Mfs High Income Municipal Trusts dividend performance and assess its sustainability.
What Does Mfs High Income Municipal Trust Do?
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.
A Glimpse at 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.
Breaking Down 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 5.17% and a 12-month forward dividend yield of 5.10%. 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 3.58%.
The Sustainability Question: 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 2023-05-31, 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 2 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.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Mfs High Income Municipal Trust'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, while Mfs High Income Municipal Trust has a consistent dividend payment history, its negative dividend growth rate, low profitability rank, and poor growth prospects raise concerns about the sustainability of its dividends. Investors should closely monitor the company's financial health and growth metrics to make informed decisions about its dividend-paying potential.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
