Unveiling the Dividend History, Yield, and Growth of FDEU
First Trust Dynamic Europe Equity Income Fund (FDEU, Financial) recently announced a dividend of $0.07 per share, payable on 2023-10-16, with the ex-dividend date set for 2023-10-02. 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 First Trust Dynamic Europe Equity Income Fund's dividend performance and assess its sustainability.
Understanding First Trust Dynamic Europe Equity Income Fund
First Trust Dynamic Europe Equity Income Fund is a non-diversified, closed-end management investment company. The fund's investment objective is to provide a high level of current income with a secondary focus on capital appreciation. The fund pursues its objective by investing a majority of its managed assets in a portfolio of equity securities of European companies of any market capitalization including common and preferred stocks that pay dividends, depositary receipts, and real estate investment trusts.
Tracing First Trust Dynamic Europe Equity Income Fund's Dividend History
First Trust Dynamic Europe Equity Income Fund has maintained a consistent dividend payment record since 2015. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Analyzing First Trust Dynamic Europe Equity Income Fund's Dividend Yield and Growth
As of today, First Trust Dynamic Europe Equity Income Fund currently has a 12-month trailing dividend yield of 6.53% and a 12-month forward dividend yield of 6.77%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, First Trust Dynamic Europe Equity Income Fund's annual dividend growth rate was -20.50%. Extended to a five-year horizon, this rate increased to -15.80% per year. Based on First Trust Dynamic Europe Equity Income Fund's dividend yield and five-year growth rate, the 5-year yield on cost of First Trust Dynamic Europe Equity Income Fund stock as of today is approximately 2.76%.
Evaluating 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, First Trust Dynamic Europe Equity Income Fund's dividend payout ratio is 0.42.
First Trust Dynamic Europe Equity Income Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks First Trust Dynamic Europe Equity 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 3 years out of the past 10 years.
Assessing Future Dividend Sustainability: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. First Trust Dynamic Europe Equity 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 First Trust Dynamic Europe Equity Income Fund's commitment to maintain consistent dividend payments is commendable, its negative growth rate and low profitability rank raise concerns about the sustainability of future dividends. Investors should closely monitor these metrics and the company's overall performance to make informed decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
