An In-depth Look into the Dividend Performance and Sustainability of High Income Securities Fund (PCF, Financial)
High Income Securities Fund (PCF) recently announced a dividend of $0.06 per share, payable on 2023-11-30, with the ex-dividend date set for 2023-11-17. 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 delve into High Income Securities Fund's dividend performance and assess its sustainability.
What Does High Income Securities Fund Do?
High Income Securities Fund is a closed-end management investment company. Its primary objective is to provide high current income and capital appreciation is the secondary objective. The Fund pursues its objective primarily by investing in both convertible bonds and convertible preferred stocks. The Fund also invests significantly in high-yielding non-convertible securities with the potential for capital appreciation.
A Glimpse at High Income Securities Fund's Dividend History
High Income Securities Fund has maintained a consistent dividend payment record since 1991. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down High Income Securities Fund's Dividend Yield and Growth
As of today, High Income Securities Fund currently has a 12-month trailing dividend yield of 12.62% and a 12-month forward dividend yield of 11.97%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, High Income Securities Fund's annual dividend growth rate was 110.20%. Extended to a five-year horizon, this rate decreased to 33.00% per year. Based on High Income Securities Fund's dividend yield and five-year growth rate, the 5-year yield on cost of High Income Securities Fund stock as of today is approximately 52.52%.
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 2023-02-28, High Income Securities Fund's dividend payout ratio is 0.00.
High Income Securities Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks High Income Securities Fund's profitability 2 out of 10 as of 2023-02-28, 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. High Income Securities 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.
Conclusion
High Income Securities Fund's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics all contribute to the overall picture of its dividend sustainability. Given its low profitability rank and growth rank, along with its 0.00 payout ratio, the sustainability of its dividend is questionable. Investors should consider these factors carefully 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.
