An Analysis of the Company's Dividend History, Yield, and Growth Rates
FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND (FTHY, Financial) recently announced a dividend of $0.13 per share, payable on October 25, 2023, with the ex-dividend date set for October 2, 2023. As investors anticipate this upcoming payment, it's important to evaluate the company's dividend history, yield, and growth rates. This article will provide an in-depth analysis of FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND's dividend performance and its sustainability, using data from GuruFocus.
Understanding FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND
FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND is a diversified, closed-end management investment company. The primary investment objective of the fund is to generate current income.
Examining FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND's Dividend History
Since 2021, FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND has maintained a consistent dividend payment record, with dividends currently being distributed on a monthly basis. The following chart illustrates the company's annual Dividends Per Share for historical trend analysis.
Assessing FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND's Dividend Yield and Growth
As of today, FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND boasts a 12-month trailing dividend yield of 11.57% and a 12-month forward dividend yield of 11.60%, indicating an expected increase in dividend payments over the next 12 months. The 5-year yield on cost of the company's stock stands at approximately 11.56%.
Evaluating Dividend Sustainability: Payout Ratio and Profitability
The sustainability of FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND's dividend can be assessed by examining its dividend payout ratio, which stands at 0.00 as of May 31, 2023. This low ratio suggests that the company retains a significant part of its earnings, ensuring funds for future growth and potential downturns. However, the company's profitability rank of 2 out of 10 raises concerns about the sustainability of its dividend, given its relatively low earnings prowess compared to its peers.
Looking at Growth Metrics for Future Prospects
Robust growth metrics are essential for ensuring dividend sustainability. Unfortunately, FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND's growth rank of 2 out of 10 suggests poor growth prospects, casting doubt on the sustainability of its dividend.
Conclusion
In conclusion, while FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND has maintained a consistent dividend payment record, concerns arise from its low profitability and growth ranks. Investors must consider these factors when assessing the sustainability of the company's dividends. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
