A Comprehensive Analysis of the Fund's Dividend Performance and Sustainability
Western Asset Diversified Income Fund (WDI, Financial) recently announced a dividend of $0.14 per share, payable on 2023-10-02, 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 Western Asset Diversified Income Fund's dividend performance and assess its sustainability.
Introducing Western Asset Diversified Income Fund
Western Asset Diversified Income Fund is a newly-organized, diversified, closed-end management investment company. The fund's primary investment objective is to seek high current income.
Tracing Western Asset Diversified Income Fund's Dividend History
Western Asset Diversified Income Fund has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Deciphering Western Asset Diversified Income Fund's Dividend Yield and Growth
As of today, Western Asset Diversified Income Fund currently has a 12-month trailing dividend yield of 11.37% and a 12-month forward dividend yield of 12.31%. This suggests an expectation of increased dividend payments over the next 12 months.
Based on Western Asset Diversified Income Fund's dividend yield and five-year growth rate, the 5-year yield on cost of Western Asset Diversified Income Fund stock as of today is approximately 11.37%.
Assessing Dividend Sustainability: 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, Western Asset Diversified Income Fund's dividend payout ratio is 1.36, which may suggest that the company's dividend may not be sustainable.
Western Asset Diversified Income Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Western Asset Diversified Income Fund'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 1 year out of the past 10 years.
Scrutinizing Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Western Asset Diversified Income Fund's growth rank of 2 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Concluding Remarks
While Western Asset Diversified Income Fund has a history of regular dividends, its high payout ratio and low profitability and growth ranks raise questions about the sustainability of its dividends. Investors need to consider these factors carefully and monitor the company's performance. Remember, a sustainable dividend is a significant contributor to long-term investment returns.
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