A Comprehensive Look at Mfs Investment Grade Municipal Trust's Dividend Performance and Sustainability
Mfs Investment Grade Municipal Trust (CXH, Financial) recently announced a dividend of $0.02 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 Investment Grade Municipal Trust's dividend performance and assess its sustainability.
What Does Mfs Investment Grade Municipal Trust Do?
Mfs Investment Grade 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, but may also consider capital appreciation. The fund invests a majority of its net assets, including assets attributable to preferred shares and borrowing for investment purposes, in tax-exempt bonds and tax-exempt notes.
A Glimpse at Mfs Investment Grade Municipal Trust's Dividend History
Mfs Investment Grade 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 Investment Grade Municipal Trust's Dividend Yield and Growth
As of today, Mfs Investment Grade Municipal Trust currently has a 12-month trailing dividend yield of 3.98% and a 12-month forward dividend yield of 3.93%. This suggests an expectation of decreased dividend payments over the next 12 months.
Mfs Investment Grade Municipal Trust's dividend yield of 3.98% is near a 10-year low and underperforms 71.62% of global competitors in the Asset Management industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors.
Over the past three years, Mfs Investment Grade Municipal Trust's annual dividend growth rate was -7.70%. Extended to a five-year horizon, this rate increased to -5.10% per year. Based on Mfs Investment Grade Municipal Trust's dividend yield and five-year growth rate, the 5-year yield on cost of Mfs Investment Grade Municipal Trust stock as of today is approximately 3.06%.
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 Investment Grade Municipal Trust's dividend payout ratio is 0.00.
Mfs Investment Grade Municipal Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Mfs Investment Grade 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 Investment Grade 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.
Next Steps
Given Mfs Investment Grade Municipal Trust's dividend payments, dividend growth rate, payout ratio, and profitability, along with its growth metrics, it appears that the company's dividend may face challenges in terms of sustainability. Investors should carefully consider these factors when making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
