A Comprehensive Review of Historical Performance and Future Prospects
Western Asset Diversified Income Fund (WDI, Financial) recently announced a dividend of $0.14 per share, payable on December 1, 2023, with the ex-dividend date set for November 21, 2023. As investors anticipate this forthcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Using GuruFocus data, this article provides a comprehensive analysis of Western Asset Diversified Income Fund's dividend performance and its sustainability.
Understanding Western Asset Diversified Income Fund
Western Asset Diversified Income Fund is a newly-organized, diversified, closed-end management investment company. Its primary investment objective is to seek high current income.
Exploring Western Asset Diversified Income Fund's Dividend History
Western Asset Diversified Income Fund has maintained a consistent dividend payment record since 2021, distributing dividends on a monthly basis. The chart below represents the annual Dividends Per Share for tracking historical trends.
Dissecting 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 12.54% and a 12-month forward dividend yield of 13.43%. This suggests an expectation of increased dividend payments over the next 12 months. Western Asset Diversified Income Fund's dividend yield of 12.54% is near a 10-year high and outperforms 89% of global competitors in the Asset Management industry, making it an attractive proposition for income investors.
Based on the company's dividend yield and five-year growth rate, the 5-year yield on cost of Western Asset Diversified Income Fund stock is approximately 12.54%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The sustainability of a dividend is often gauged by examining the company's payout ratio. The dividend payout ratio reveals the proportion of earnings the company distributes as dividends. A lower ratio indicates that the company retains a significant part of its earnings, ensuring the availability of funds for future growth and unexpected downturns. As of June 30, 2023, 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, as given by GuruFocus, provides insights into the company's earnings prowess relative to its peers. As of June 30, 2023, the company's profitability rank is 1 out of 10, suggesting that the dividend may not be sustainable. The company has reported net profit in 1 year out of the past 10 years.
Future Prospects: Growth Metrics
For dividends to be sustainable, a company must exhibit robust growth metrics. Western Asset Diversified Income Fund's growth rank of 1 out of 10 suggests that the company has poor growth prospects, indicating that the dividend may not be sustainable.
Conclusion
While Western Asset Diversified Income Fund offers a high dividend yield, the sustainability of these dividends is uncertain due to the company's high payout ratio and low profitability and growth ranks. Investors should consider these factors and conduct further research before making any 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.
