Insights into AOD's Dividend Sustainability and Growth Prospects
Aberdeen Total Dynamic Dividend Fund (AOD, Financial) recently announced a dividend of $0.06 per share, payable on 2024-01-31, with the ex-dividend date set for 2024-01-23. 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 look into Aberdeen Total Dynamic Dividend Fund's dividend performance and assess its sustainability.
What Does Aberdeen Total Dynamic Dividend Fund Do?
Aberdeen Total Dynamic Dividend Fund is a diversified, closed-end management investment company. Its investment objective is to seek high current dividend income. The company also focuses on the long-term growth of capital as a secondary investment objective. It predominantly invests in foreign securities, including direct investments in securities of foreign issuers and investments in depositary receipts that represent indirect interests in securities of foreign issuers. Its portfolio consists of securities from Information Technology, Financial, Healthcare, Industrials among other sectors.
A Glimpse at Aberdeen Total Dynamic Dividend Fund's Dividend History
Aberdeen Total Dynamic Dividend Fund has maintained a consistent dividend payment record since 2007. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Aberdeen Total Dynamic Dividend Fund's Dividend Yield and Growth
As of today, Aberdeen Total Dynamic Dividend Fund currently has a 12-month trailing dividend yield of 8.61% and a 12-month forward dividend yield of 8.61%. This suggests an expectation of the same dividend payments over the next 12 months. Based on Aberdeen Total Dynamic Dividend Fund's dividend yield and five-year growth rate, the 5-year yield on cost of Aberdeen Total Dynamic Dividend Fund stock as of today is approximately 8.61%.
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 2023-10-31, Aberdeen Total Dynamic Dividend Fund's dividend payout ratio is 1.10, which may suggest that the company's dividend may not be sustainable.
Aberdeen Total Dynamic Dividend Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Aberdeen Total Dynamic Dividend Fund's profitability 2 out of 10 as of 2023-10-31, suggesting the dividend may not be sustainable. The company has reported net profit in 5 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 Total Dynamic Dividend 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.
Next Steps for Investors
In conclusion, while Aberdeen Total Dynamic Dividend Fund offers a high dividend yield, its payout ratio, profitability rank, and growth metrics raise questions about the long-term sustainability of its dividends. Investors should consider these factors in conjunction with their own investment strategy and risk tolerance. For those seeking additional dividend investment opportunities, 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.
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