Exploring the Sustainability of PIMCO Dynamic Income Fund's Dividends
PIMCO Dynamic Income Fund (PDI, Financial) recently announced a dividend of $0.22 per share, payable on 2024-07-01, with the ex-dividend date set for 2024-06-13. 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 PIMCO Dynamic Income Funds dividend performance and assess its sustainability.
What Does PIMCO Dynamic Income Fund Do?
PIMCO Dynamic Income Fund is a United States-based closed-end management investment company. The fund's investment objective is to seek current income, with a secondary objective of capital appreciation. It invests globally in a diverse portfolio of debt obligations and other income-producing securities across various maturities, alongside related derivative instruments. Its investments include mortgage-backed securities, investment grade and high-yield corporates, corporate and sovereign bonds, other income-producing securities, and related derivative instruments.
A Glimpse at PIMCO Dynamic Income Fund's Dividend History
PIMCO Dynamic Income Fund has maintained a consistent dividend payment record since 2012, with dividends currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down PIMCO Dynamic Income Fund's Dividend Yield and Growth
As of today, PIMCO Dynamic Income Fund currently boasts a 12-month trailing dividend yield of 13.65% and a 12-month forward dividend yield of 13.65%, indicating an expectation of consistent dividend payments over the next 12 months. Additionally, based on PIMCO Dynamic Income Fund's dividend yield and five-year growth rate, the 5-year yield on cost of PIMCO Dynamic Income Fund stock as of today is approximately 13.65%.
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 2023-12-31, PIMCO Dynamic Income Fund's dividend payout ratio is 1.41, which may suggest that the company's dividend could be at risk. Furthermore, PIMCO Dynamic Income Fund's profitability rank of 2 out of 10 as of 2023-12-31, coupled with reporting net profit in only 4 out of the past 10 years, further casts doubt on the sustainability of future dividends.
Growth Metrics: The Future Outlook
PIMCO Dynamic Income Fund's growth rank of 2 out of 10 suggests that the company has limited growth prospects, which may hinder its ability to sustain dividend payments in the long term.
In conclusion, while the high dividend yield of PIMco Dynamic Income Fund may be attractive, potential investors should be cautious due to the fund's low profitability and growth metrics. These factors could impact the sustainability of its dividend payments. For those looking to diversify their portfolio with high-dividend yield stocks, consider using the High Dividend Yield Screener available to GuruFocus Premium users.
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.
