An Analysis of the Company's Dividend History, Yield, and Growth Rates
FS Credit Opp Corp.(FSCO, Financial) recently announced a dividend of $0.06 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-21. 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 deep dive into FS Credit Opp Corp.'s dividend performance and assess its sustainability.
What Does FS Credit Opp Corp. Do?
FS Credit Opp Corp. is a closed-end management investment company. The Fund's primary investment objective is to generate an attractive total return consisting of a high level of current income and capital appreciation, with a secondary objective of capital preservation. The Fund seeks to achieve its investment objectives by focusing on strategies such as Opportunistic Credit (including event-driven and market price inefficiencies), Special Situations, and Capital Structure Solutions.
A Glimpse at FS Credit Opp Corp.'s Dividend History
FS Credit Opp Corp. has maintained a consistent dividend payment record since 2022. Dividends are currently distributed on a monthly basis. FS Credit Opp Corp. has increased its dividend each year since -. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 2023 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down FS Credit Opp Corp.'s Dividend Yield and Growth
As of today, FS Credit Opp Corp. currently has a 12-month trailing dividend yield of 9.66% and a 12-month forward dividend yield of 13.10%. This suggests an expectation of increased dividend payments over the next 12 months. FS Credit Opp Corp.'s dividend yield of 9.66% is near a 10-year high and outperforms 77.72% of global competitors in the Asset Management industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Based on FS Credit Opp Corp.'s dividend yield and five-year growth rate, the 5-year yield on cost of FS Credit Opp Corp. stock as of today is approximately 9.66%.
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, FS Credit Opp Corp.'s dividend payout ratio is 0.00.
FS Credit Opp Corp.'s profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks FS Credit Opp Corp.'s profitability 1 out of 10 as of 2023-06-30, suggesting the dividend may not be sustainable. The company has reported net profit in 0 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. FS Credit Opp Corp.'s growth rank of 1 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Next Steps
In conclusion, while FS Credit Opp Corp. has a commendable dividend history and attractive yield, its sustainability is questionable due to a low profitability rank and poor growth prospects. Investors should thus exercise caution and conduct thorough research before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
