Exploring the Dividend History, Yield, and Sustainability of Aberdeen Asia-Pacific Income Fund Inc (FAX, Financial)
Aberdeen Asia-Pacific Income Fund Inc (FAX) recently announced a dividend of $0.03 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-21. As investors anticipate this upcoming payment, the focus also shifts to 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 evaluate its sustainability.
Understanding Aberdeen Asia-Pacific Income Fund Inc
Aberdeen Asia-Pacific Income Fund Inc is a United States-based closed-end, non-diversified management investment company. Its primary 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.
Tracing Aberdeen Asia-Pacific Income Fund Inc's Dividend History
Aberdeen Asia-Pacific Income Fund Inc has maintained a consistent dividend payment record since 1988, with dividends currently distributed on a monthly basis. The following chart shows annual Dividends Per Share for tracking historical trends.
Dissecting Aberdeen Asia-Pacific Income Fund Inc's Dividend Yield and Growth
As of today, Aberdeen Asia-Pacific Income Fund Inc boasts a 12-month trailing dividend yield of 12.55% and a 12-month forward dividend yield of 12.55%, suggesting an expectation of similar 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%. When 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 6.29%.
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.
Furthermore, Aberdeen Asia-Pacific Income Fund Inc's profitability rank provides insight into 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 the 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.
Concluding Thoughts
While Aberdeen Asia-Pacific Income Fund Inc has a commendable dividend history and impressive yield, the company's negative growth rate and low profitability rank raise questions about the sustainability of its dividends. As such, investors should closely monitor these metrics and consider them in their investment decisions. Remember, a sustainable dividend is a sign of a financially healthy company.
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