A Comprehensive Look at HYB's Dividend Performance and Sustainability
New America High Income Fund Inc (HYB, Financial) recently announced a dividend of $0.04 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-16. As investors anticipate this upcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Using GuruFocus data, we will delve into New America High Income Fund Inc's dividend performance and evaluate its sustainability.
Understanding New America High Income Fund Inc's Business
New America High Income Fund Inc is a diversified, closed-end management investment company. Its primary objective is to provide high current income while preserving stockholder capital through investments in a diversified portfolio of high-yield fixed-income securities. The fund primarily invests in fixed-maturity corporate debt securities rated below investment grade. Its investment portfolio spans various sectors, including energy, financial, cable operators, healthcare, among others.
A Look at New America High Income Fund Inc's Dividend History
Since 1988, New America High Income Fund Inc has maintained a consistent dividend payment record, currently distributing dividends on a monthly basis. The chart below shows the annual Dividends Per Share for historical trend tracking.
Exploring New America High Income Fund Inc's Dividend Yield and Growth
As of today, New America High Income Fund Inc has a 12-month trailing dividend yield of 8.15% and a 12-month forward dividend yield of 7.52%. This indicates an anticipated decrease in dividend payments over the next 12 months.
In the past three years, New America High Income Fund Inc's annual dividend growth rate was -3.10%. When extended to a five-year horizon, this rate increased to -0.80% per year. Based on the company's dividend yield and five-year growth rate, the 5-year yield on cost of New America High Income Fund Inc stock as of today is approximately 7.83%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The sustainability of a dividend can be evaluated by examining the company's payout ratio. The dividend payout ratio reveals the proportion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant portion of its earnings, ensuring funds for future growth and unexpected downturns. As of 2023-06-30, New America High Income Fund Inc's dividend payout ratio is 0.62.
The profitability rank of New America High Income Fund Inc provides insight into the company's earnings prowess relative to its peers. As of 2023-06-30, GuruFocus ranks the company's profitability at 2 out of 10, suggesting that the dividend may not be sustainable. The company has reported net profit in 4 of the past 10 years.
Examining Growth Metrics: The Future Outlook
Robust growth metrics are essential for the sustainability of dividends. New America High Income Fund Inc's growth rank of 2 out of 10 suggests poor growth prospects, which could potentially jeopardize the sustainability of the dividend.
Conclusion
While New America High Income Fund Inc's consistent dividend payments and high current yield may seem attractive, the negative dividend growth rate, high payout ratio, and low profitability and growth ranks raise sustainability concerns. Investors should consider these factors thoroughly before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
