A deep-dive into the dividend performance of MFS Intermediate Income Trust (MIN, Financial)
MFS Intermediate Income Trust (MIN) recently announced a dividend of $0.02 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-12. As investors anticipate this upcoming payment, it brings into focus the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into MFS Intermediate Income Trust's dividend performance and assess its sustainability.
What Does MFS Intermediate Income Trust Do?
MFS Intermediate Income Trust is a diversified closed-end management investment company. Its primary objective is to seek high current income, with a secondary consideration for capital appreciation. The fund invests predominantly in debt instruments, providing a diverse portfolio that includes automotive, chemicals, energy, food and beverages, insurance, and other sectors.
A Glimpse at MFS Intermediate Income Trust's Dividend History
Since 1988, MFS Intermediate Income Trust has maintained a consistent dividend payment record. Currently, dividends are distributed on a monthly basis. The chart below provides a historical overview of the company's annual Dividends Per Share.
Breaking Down MFS Intermediate Income Trust's Dividend Yield and Growth
As of today, MFS Intermediate Income Trust has a 12-month trailing dividend yield of 9.38% and a 12-month forward dividend yield of 9.33%. This indicates an expectation of decreased dividend payments over the next 12 months.
Over the past three years, MFS Intermediate Income Trust's annual dividend growth rate was -6.40%. When extended to a five-year horizon, this rate increased to -5.40% per year. Based on these figures, the 5-year yield on cost of MFS Intermediate Income Trust stock stands at approximately 7.11% as of today.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of a dividend is often evaluated using the company's payout ratio. The dividend payout ratio offers 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, providing a cushion for future growth and unexpected downturns. As of 2023-04-30, MFS Intermediate Income Trust's dividend payout ratio is 6.55, which may suggest that the company's dividend may not be sustainable.
MFS Intermediate Income Trust's profitability rank offers an understanding of the company's earnings prowess relative to its peers. As of 2023-04-30, GuruFocus ranks MFS Intermediate Income Trust's profitability 2 out of 10, suggesting the dividend may not be sustainable. Over the past 10 years, the company has reported net profit in 4 years.
Growth Metrics: The Future Outlook
For a company to sustain its dividends, robust growth metrics are essential. MFS Intermediate Income 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
In conclusion, while MFS Intermediate Income Trust's dividend payments have been consistent, its growth rate, payout ratio, profitability, and growth metrics raise questions about the sustainability of its dividends. Investors should consider these factors carefully when making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
