An In-depth Look at the Dividend Performance and Sustainability of Aberdeen Asia-pacific Income Fund Inc
Aberdeen Asia-pacific Income Fund Inc (FAX, Financial) recently announced a dividend of $0.03 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-23. 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 delve into Aberdeen Asia-pacific Income Fund Inc's dividend performance and assess its sustainability.
What Does Aberdeen Asia-pacific Income Fund Inc Do?
Aberdeen Asia-pacific Income Fund Inc is a United States-based closed-end, non-diversified management investment company. Its principal investment objective is to seek current income along with capital appreciation. The fund invests in Asian debt securities, Australian debt securities, New Zealand debt securities, and other securities.
A Glimpse at Aberdeen Asia-pacific Income Fund Inc's Dividend History
Aberdeen Asia-pacific Income Fund Inc has maintained a consistent dividend payment record since 1988. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Aberdeen Asia-pacific Income Fund Inc's Dividend Yield and Growth
As of today, Aberdeen Asia-pacific Income Fund Inc currently has a 12-month trailing dividend yield of 13.64% and a 12-month forward dividend yield of 13.64%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Aberdeen Asia-pacific Income Fund Inc's annual dividend growth rate was -3.60%. Extended to a five-year horizon, this rate decreased to -12.90% per year. Based on Aberdeen Asia-pacific Income Fund Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Aberdeen Asia-pacific Income Fund Inc stock as of today is approximately 6.84%.
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 2023-04-30, Aberdeen Asia-pacific Income Fund Inc's dividend payout ratio is 0.00.
Aberdeen Asia-pacific Income Fund Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Aberdeen Asia-pacific Income Fund Inc's profitability 3 out of 10 as of 2023-04-30, suggesting the dividend may not be sustainable. The company has reported net profit in 6 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Aberdeen Asia-pacific Income Fund Inc's growth rank of 3 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Next Steps
In conclusion, while Aberdeen Asia-pacific Income Fund Inc has a commendable dividend yield, the negative growth rate and low profitability rank raise questions 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.
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.
