An In-Depth Assessment of the Company's Dividend Performance and Sustainability
MFS Multimarket Income Trust (MMT, Financial) recently announced a dividend of $0.03 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-17. 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 MFS Multimarket Income Trust's dividend performance and assess its sustainability.
Understanding MFS Multimarket Income Trust
MFS Multimarket Income Trust is a diversified closed-end management investment company. The fund primarily focuses on high current income, but may also consider capital appreciation. It invests a majority of its net assets in fixed-income securities, corporate bonds of the US and foreign issuers, US Government securities, foreign government securities, mortgage-backed and other asset-backed securities of US and foreign issuers, and debt instruments of issuers located in emerging market countries. The portfolio comprises different sector investments such as aerospace, airlines, automotive, chemicals, electronics, and others.
Reviewing MFS Multimarket Income Trust's Dividend History
Since 1988, MFS Multimarket Income Trust has maintained a consistent dividend payment record, with dividends currently distributed on a monthly basis. The chart below shows the annual Dividends Per Share for historical trend tracking.
Assessing MFS Multimarket Income Trust's Dividend Yield and Growth
Currently, MFS Multimarket Income Trust has a 12-month trailing dividend yield and a 12-month forward dividend yield of 9.40%, indicating an expectation of stable dividend payments over the next 12 months.
Over the past three years, the company's annual dividend growth rate was -4.60%, which increased to -3.20% per year over a five-year horizon. Based on the dividend yield and five-year growth rate, the 5-year yield on cost of MFS Multimarket Income Trust stock as of today is approximately 7.99%.
Evaluating Dividend Sustainability: Payout Ratio and Profitability
To gauge the sustainability of the dividend, it's crucial to examine the company's payout ratio. The dividend payout ratio reveals 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 2023-04-30, MFS Multimarket Income Trust's dividend payout ratio is 4.97, which may suggest that the company's dividend may not be sustainable.
The profitability rank of MFS Multimarket Income Trust, as of 2023-04-30, is 2 out of 10, suggesting that the dividend may not be sustainable. Over the past ten years, the company has reported net profit in four years.
Future Prospects: Growth Metrics
For dividends to be sustainable, a company must possess robust growth metrics. However, MFS Multimarket Income Trust'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
While MFS Multimarket Income Trust has a consistent dividend payment history, its current dividend growth rate, payout ratio, profitability, and growth metrics raise concerns about the sustainability of its dividends. 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.
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