A Comprehensive Review of DHY's Dividend Performance and Sustainability
Credit Suisse High Yield Bond Fund (DHY, Financial) recently announced a dividend of $0.02 per share, payable on 2023-10-24, with the ex-dividend date set for 2023-10-17. As investors anticipate this upcoming payment, it's essential to scrutinize the company's dividend history, yield, and growth rates. Using GuruFocus data, this article delves into Credit Suisse High Yield Bond Fund's dividend performance and evaluates its sustainability.
Understanding Credit Suisse High Yield Bond Fund's Business
Credit Suisse High Yield Bond Fund is a non-diversified, closed-end management investment company. Its primary objective is to seek high current income, with capital appreciation as a secondary aim.
Reviewing Credit Suisse High Yield Bond Fund's Dividend History
Since 1998, Credit Suisse High Yield Bond Fund has maintained a steady dividend payment record, currently distributing dividends on a monthly basis. The chart below provides a historical overview of the annual Dividends Per Share.
Assessing Credit Suisse High Yield Bond Fund's Dividend Yield and Growth
As of today, Credit Suisse High Yield Bond Fund boasts a 12-month trailing dividend yield and a 12-month forward dividend yield of 9.89%, indicating an expectation of consistent dividend payments over the next 12 months.
Over the past three years, the fund's annual dividend growth rate was -6.80%. This rate decreased to -7.70% per year when extended to a five-year horizon. Over the past decade, the annual dividends per share growth rate stands at -5.70%. Based on the dividend yield and five-year growth rate, the 5-year yield on cost of Credit Suisse High Yield Bond Fund stock as of today is approximately 6.63%.
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 the company retains a significant portion of its earnings, ensuring funds for future growth and unexpected downturns. As of 2023-04-30, Credit Suisse High Yield Bond Fund's dividend payout ratio is 0.00.
The company's profitability rank provides insights into its earnings prowess relative to its peers. As of 2023-04-30, Credit Suisse High Yield Bond Fund's profitability rank is 3 out of 10, suggesting the dividend may not be sustainable. The company has reported net profit in 8 years out of the past 10 years.
Considering Growth Metrics for Future Outlook
For dividends to be sustainable, a company must demonstrate strong growth metrics. Credit Suisse High Yield Bond Fund's growth rank of 3 out of 10 suggests poor growth prospects, which could imply the dividend may not be sustainable.
Concluding Remarks
While Credit Suisse High Yield Bond Fund's consistent dividend payments and high yield are attractive, the negative dividend growth rate, low profitability rank, and poor growth prospects raise concerns about the sustainability of its dividends. Investors should consider these factors carefully when evaluating the fund's dividend performance. 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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