An In-Depth Look at EVV's Dividend Performance and Future Prospects
Eaton Vance Ltd Duration Income Fund (EVV, Financial) recently announced a dividend of $0.08 per share, payable on 2024-06-20, with the ex-dividend date set for 2024-06-12. 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 Ltd Duration Income Fund's dividend performance and assess its sustainability.
What Does Eaton Vance Ltd Duration Income Fund Do?
Eaton Vance Ltd Duration Income Fund is a diversified closed-end management investment company. The company's investment objective is to provide a high level of current income. The Fund may, as a secondary objective, also seek capital appreciation. The Fund invests predominantly in Senior Floating-Rate Loans, Debt Obligations, Equity Securities, Derivatives as well as Foreign Securities and Currencies. The Fund invests in various industries, including aerospace and defense, automotive, building and development, healthcare, and leisure among others.
A Glimpse at Eaton Vance Ltd Duration Income Fund's Dividend History
Eaton Vance Ltd Duration Income Fund has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Eaton Vance Ltd Duration Income Fund's Dividend Yield and Growth
As of today, Eaton Vance Ltd Duration Income Fund currently has a 12-month trailing dividend yield of 9.46% and a 12-month forward dividend yield of 9.52%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Eaton Vance Ltd Duration Income Fund's annual dividend growth rate was -7.90%. Extended to a five-year horizon, this rate increased to 1.60% per year. And over the past decade, Eaton Vance Ltd Duration Income Fund's annual dividends per share growth rate stands at -0.80%.
Based on Eaton Vance Ltd Duration Income Fund's dividend yield and five-year growth rate, the 5-year yield on cost of Eaton Vance Ltd Duration Income Fund stock as of today is approximately 10.24%.
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 2024-03-31, Eaton Vance Ltd Duration Income Fund's dividend payout ratio is 0.90. And this may suggest that the company's dividend may not be sustainable.
Eaton Vance Ltd Duration Income Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Eaton Vance Ltd Duration Income Fund's profitability 3 out of 10 as of 2024-03-31, suggesting the dividend may not be sustainable. The company has reported net profit in 6 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Eaton Vance Ltd Duration Income Fund'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 Eaton Vance Ltd Duration Income Fund's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Eaton Vance Ltd Duration Income Fund's revenue has decreased by approximately -26.40% per year on average, a rate that underperforms approximately 82.81% 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, Eaton Vance Ltd Duration Income Fund's earnings decreased by approximately -29.70% per year on average, a rate that underperforms approximately 80.93% of global competitors.
Conclusion
While Eaton Vance Ltd Duration Income Fund offers an attractive dividend yield, the sustainability of these payments is questionable given the company's negative growth metrics and low profitability ranking. Investors should consider these factors carefully before making investment decisions. For those looking to explore more high-dividend yield opportunities, 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.
