Assessing the Sustainability of DoubleLine Yield Opportunities Fund's Dividend
DoubleLine Yield Opportunities Fund (DLY, Financial) recently announced a dividend of $0.12 per share, payable on 2024-04-30, with the ex-dividend date set for 2024-04-17. 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 look into DoubleLine Yield Opportunities Fund's dividend performance and assess its sustainability.
What Does DoubleLine Yield Opportunities Fund Do?
DoubleLine Yield Opportunities Fund is organized as a non-diversified, limited-term, closed-end management investment company. The Fund's investment objective is to seek a high level of total return, with an emphasis on current income.
A Glimpse at DoubleLine Yield Opportunities Fund's Dividend History
DoubleLine Yield Opportunities Fund has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down DoubleLine Yield Opportunities Fund's Dividend Yield and Growth
As of today, DoubleLine Yield Opportunities Fund currently has a 12-month trailing dividend yield of 9.25% and a 12-month forward dividend yield of 9.25%. This suggests an expectation of the same dividend payments over the next 12 months.
Based on DoubleLine Yield Opportunities Fund's dividend yield and five-year growth rate, the 5-year yield on cost of DoubleLine Yield Opportunities Fund stock as of today is approximately 9.25%.
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 2023-09-30, DoubleLine Yield Opportunities Fund's dividend payout ratio is 1.11, and this may suggest that the company's dividend may not be sustainable.
DoubleLine Yield Opportunities Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks DoubleLine Yield Opportunities Fund's profitability 2 out of 10 as of 2023-09-30, suggesting the dividend may not be sustainable. The company has reported net profit in 2 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. DoubleLine Yield Opportunities 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.
Investor Considerations and Next Steps
Considering DoubleLine Yield Opportunities Fund's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, investors should approach this stock with caution. While the high dividend yield may be attractive, the underlying financials raise questions about the long-term viability of these payouts. Investors are encouraged to conduct thorough due diligence and consider the company's ability to sustain its dividend in light of its payout ratio, profitability rank, and growth prospects. For those seeking income-generating investments, 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.
