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Gabelli Dividend & Income Trust's Dividend Analysis

Understanding GDV's Dividend Prospects and Financial Health

Gabelli Dividend & Income Trust (NYSE:GDV) recently announced a dividend of $0.11 per share, payable on 2024-05-23, with the ex-dividend date set for 2024-05-15. 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 Gabelli Dividend & Income Trust's dividend performance and assess its sustainability.

What Does Gabelli Dividend & Income Trust Do?

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Gabelli Dividend & Income Trust operates as a diversified closed-end management investment company. The fund's investment objective is to provide a high level of total return on its assets with an emphasis on dividends and income. To achieve its objective, the fund may invest its assets in dividend-paying securities or other income-producing securities. The fund invests in various sectors, including Financial Services, Food & Beverage, Health Care, Consumer Products, Electronics, and Computer Software & Services, among others.

Gabelli Dividend & Income Trust's Dividend Analysis
Gabelli Dividend & Income Trust's Dividend Analysis

A Glimpse at Gabelli Dividend & Income Trust's Dividend History

Gabelli Dividend & Income Trust has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down Gabelli Dividend & Income Trust's Dividend Yield and Growth

As of today, Gabelli Dividend & Income Trust currently has a 12-month trailing dividend yield of 6.01% and a 12-month forward dividend yield of 6.01%. This suggests an expectation of the same dividend payments over the next 12 months. Extended to a five-year horizon, this rate increased to 0.10% per year. Based on Gabelli Dividend & Income Trust's dividend yield and five-year growth rate, the 5-year yield on cost of Gabelli Dividend & Income Trust stock as of today is approximately 6.04%.

Gabelli Dividend & Income Trust's Dividend Analysis
Gabelli Dividend & Income Trust's Dividend Analysis

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 2023-12-31, Gabelli Dividend & Income Trust's dividend payout ratio is 0.46.

Gabelli Dividend & Income Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Gabelli Dividend & Income Trust's profitability 3 out of 10 as of 2023-12-31, 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. Gabelli Dividend & Income Trust's growth rank of 3 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable. Revenue is the lifeblood of any company, and Gabelli Dividend & Income Trust's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Gabelli Dividend & Income Trust's revenue has increased by approximately 7.80% per year on average, a rate that outperforms approximately 50.64% of global competitors.

The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Gabelli Dividend & Income Trust's earnings increased by approximately 9.30% per year on average, a rate that outperforms approximately 52.07% of global competitors.

Concluding Thoughts on Gabelli Dividend & Income Trust's Dividends

In conclusion, Gabelli Dividend & Income Trust's consistent dividend payments and a respectable yield on cost present an attractive proposition for income-focused investors. However, the modest profitability and growth ranks highlight the need for prospective investors to weigh the sustainability of such dividends. Keeping an eye on the company's ability to maintain its earnings and growth will be key to ensuring that the dividend payouts remain a reliable source of income. For those seeking to diversify their portfolio with dividend-yielding stocks, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener. As GDV approaches its ex-dividend date, investors should consider both the opportunities and risks associated with this income-generating asset.

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.

This article first appeared on GuruFocus.