An In-Depth Look at ETW's Dividend Sustainability
Eaton Vance Tax-mangd Glo Buy-write Oppo (ETW, Financial) recently announced a dividend of $0.06 per share, payable on 2024-01-31, with the ex-dividend date set for 2024-01-22. 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 Eaton Vance Tax-mangd Glo Buy-write Oppos dividend performance and assess its sustainability.
What Does Eaton Vance Tax-mangd Glo Buy-write Oppo Do?
Eaton Vance Tax-mangd Glo Buy-write Oppo is a United States-based 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. The fund invests in a diversified portfolio of common stocks and writes call options on one or more U.S. indices on a substantial portion of the value of its common stock portfolio to generate current earnings from the option premium. Its portfolio of investments consists of the capital markets, chemicals, banks, biotechnology, media, and other sectors.
A Glimpse at Eaton Vance Tax-mangd Glo Buy-write Oppo's Dividend History
Eaton Vance Tax-mangd Glo Buy-write Oppo has maintained a consistent dividend payment record since 2005. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Eaton Vance Tax-mangd Glo Buy-write Oppo's Dividend Yield and Growth
As of today, Eaton Vance Tax-mangd Glo Buy-write Oppo currently has a 12-month trailing dividend yield of 8.92% and a 12-month forward dividend yield of 8.92%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Eaton Vance Tax-mangd Glo Buy-write Oppo's annual dividend growth rate was -1.10%. Extended to a five-year horizon, this rate decreased to -5.60% per year. Based on Eaton Vance Tax-mangd Glo Buy-write Oppo's dividend yield and five-year growth rate, the 5-year yield on cost of Eaton Vance Tax-mangd Glo Buy-write Oppo stock as of today is approximately 6.69%.
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 2023-06-30, Eaton Vance Tax-mangd Glo Buy-write Oppo's dividend payout ratio is 0.70, which may suggest that the company's dividend may not be sustainable.
Eaton Vance Tax-mangd Glo Buy-write Oppo's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Eaton Vance Tax-mangd Glo Buy-write Oppo's profitability 2 out of 10 as of 2023-06-30, suggesting the dividend may not be sustainable. The company has reported net profit in 4 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Eaton Vance Tax-mangd Glo Buy-write Oppo'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
Investors in Eaton Vance Tax-mangd Glo Buy-write Oppo must weigh the high dividend yield against the potential risks indicated by the negative dividend growth rate, low profitability rank, and poor growth outlook. While the current yield is attractive, the sustainability of Eaton Vance Tax-mangd Glo Buy-write Oppo's dividends could be in question, given the company's financial metrics. Value investors should consider these factors in their investment decisions and keep an eye on the company's future earnings reports and strategic initiatives that may influence the dividend's reliability. 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.
