A Comprehensive Analysis of THW's Dividend History, Yield, Growth, and Sustainability
Tekla World Healthcare Fund (THW, Financial) recently announced a dividend of $0.12 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-20. As investors anticipate this upcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. This article, leveraging data from GuruFocus, provides an in-depth analysis of Tekla World Healthcare Fund's dividend performance and assesses its sustainability.
Understanding Tekla World Healthcare Fund's Operations
Tekla World Healthcare Fund is a non-diversified closed-end management investment company. It aims to generate current income and long-term capital appreciation through investments in U.S. and non-U.S. companies in the healthcare industry. The company's investment portfolio spans various sub-sectors, including pharmaceuticals and biotechnology, healthcare providers and services, real estate investment trusts, medical devices and diagnostics, and other areas.
A Look at Tekla World Healthcare Fund's Dividend History
Tekla World Healthcare Fund has a consistent dividend payment record since 2015, with dividends currently distributed on a monthly basis. The following chart illustrates the annual Dividends Per Share for tracking historical trends.
Exploring Tekla World Healthcare Fund's Dividend Yield and Growth
Currently, Tekla World Healthcare Fund has a 12-month trailing dividend yield of 11.14% and a 12-month forward dividend yield of 11.14%, suggesting an expectation of consistent dividend payments over the next 12 months. Based on the company's dividend yield and five-year growth rate, the 5-year yield on cost of Tekla World Healthcare Fund stock is approximately 11.14% as of today.
Is Tekla World Healthcare Fund's Dividend Sustainable?
To determine the sustainability of the dividend, it's crucial to consider the company's payout ratio. The dividend payout ratio reveals the portion of earnings the company distributes as dividends. A lower ratio indicates that the company retains a significant part of its earnings, ensuring the availability of funds for future growth and unexpected downturns. As of 2023-03-31, Tekla World Healthcare Fund's dividend payout ratio is 0.00.
Tekla World Healthcare Fund's profitability rank provides insights into the company's earnings prowess relative to its peers. GuruFocus ranks Tekla World Healthcare Fund's profitability 2 out of 10 as of 2023-03-31, suggesting potential concerns about dividend sustainability. The company has reported net profit in 4 years out of the past 10 years.
Assessing Tekla World Healthcare Fund's Growth Metrics
For a company to sustain dividends, robust growth metrics are essential. Tekla World Healthcare Fund's growth rank of 2 out of 10 suggests poor growth prospects, raising concerns about dividend sustainability. Tekla World Healthcare Fund's revenue per share and 3-year revenue growth rate indicate a strong revenue model, despite its revenue increasing by approximately -75.90% per year on average, underperforming approximately 95.66% of global competitors.
The company's 3-year EPS growth rate is crucial for sustaining dividends in the long run. Over the past three years, Tekla World Healthcare Fund's earnings increased by approximately -136.00% per year on average, underperforming approximately 96.6% of global competitors.
Conclusion
While Tekla World Healthcare Fund's consistent dividend payment record and high yield are attractive, the company's low profitability and growth ranks raise concerns about the sustainability of its dividends. The company's negative revenue and EPS growth rates further underscore these concerns. Investors must consider these factors before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
