Assessing the Sustainability of EXG's Upcoming Dividend
Eaton Vance Tax-Mgd Glbl Div Eq Inc (EXG, Financial) recently announced a dividend of $0.07 per share, payable on 2024-04-30, with the ex-dividend date set for 2024-04-22. 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 Eaton Vance Tax-Mgd Glbl Div Eq Inc's dividend performance and assess its sustainability.
What Does Eaton Vance Tax-Mgd Glbl Div Eq Inc Do?
Eaton Vance Tax-Mgd Glbl Div Eq Inc is a diversified, closed-end management investment company. Its primary investment objective is to provide current income and gains. The secondary objective of the fund is capital appreciation. It invests in a diversified portfolio of domestic and foreign common stocks with an emphasis on dividend-paying stocks and writes call options on one or more U.S. and foreign indices with respect to a portion of the value of its common stock portfolio to generate current cash flow from the options premium received. Its portfolio of investments consists of capital markets, banks, internet and direct marketing retail, biotechnology, media, oil, gas, and consumable fuels, and other sectors.
A Glimpse at Eaton Vance Tax-Mgd Glbl Div Eq Inc's Dividend History
Eaton Vance Tax-Mgd Glbl Div Eq Inc has maintained a consistent dividend payment record since 2007, distributing dividends on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Eaton Vance Tax-Mgd Glbl Div Eq Inc's Dividend Yield and Growth
As of today, Eaton Vance Tax-Mgd Glbl Div Eq Inc currently has a 12-month trailing dividend yield of 8.52% and a 12-month forward dividend yield of 10.12%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, Eaton Vance Tax-Mgd Glbl Div Eq Inc's annual dividend growth rate was -3.50%, which decreased to -3.70% per year over a five-year horizon. Based on Eaton Vance Tax-Mgd Glbl Div Eq Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Eaton Vance Tax-Mgd Glbl Div Eq Inc stock as of today is approximately 7.06%.
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. As of 2023-10-31, Eaton Vance Tax-Mgd Glbl Div Eq Inc's dividend payout ratio is 0.78, which may suggest that the company's dividend may not be sustainable. Eaton Vance Tax-Mgd Glbl Div Eq Inc's profitability rank of 2 out of 10 as of 2023-10-31, combined with the fact that the company has reported net profit in 5 years out of the past 10 years, further suggests that the dividend may not be sustainable.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Eaton Vance Tax-Mgd Glbl Div Eq Inc's growth rank of 2 out of 10 suggests poor growth prospects, which could impact dividend sustainability. However, Eaton Vance Tax-Mgd Glbl Div Eq Inc's revenue per share and the 3-year revenue growth rate indicate a strong revenue model, with revenue increasing by approximately 84.50% per year on average, outperforming approximately 92.24% of global competitors. Additionally, the company's 3-year EPS growth rate shows earnings increasing by approximately 87.80% per year on average, which outperforms approximately 93.49% of global competitors.
Engaging Conclusion: Weighing Dividend Prospects
While Eaton Vance Tax-Mgd Glbl Div Eq Inc's dividend yield is attractive, its negative dividend growth rate, low profitability rank, and payout ratio raise questions about the long-term sustainability of its dividends. However, the company's strong revenue and EPS growth rates provide a counterbalance, suggesting potential for future dividend stability. Investors must weigh these factors carefully, considering not only the current yield but also the company's ability to maintain and grow its dividend payments. For those looking to expand their income-generating portfolio, 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.
