A Deep Dive into the Dividend Performance and Sustainability of Eaton Vance Enhanced Equity Income Fund (EOI, Financial)
Eaton Vance Enhanced Equity Income Fund (EOI) recently announced a dividend of $0.11 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-21. 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 deep dive into Eaton Vance Enhanced Equity Income Fund's dividend performance and assess its sustainability.
Understanding Eaton Vance Enhanced Equity Income Fund
Eaton Vance Enhanced Equity Income Fund offers mutual funds that invest across a wide array of equity, income, and alternative strategies. The primary investment objective of the fund is to provide current income, with a secondary objective of capital appreciation.
A Glimpse at Eaton Vance Enhanced Equity Income Fund's Dividend History
Eaton Vance Enhanced Equity Income Fund has maintained a consistent dividend payment record since 2004. 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 Enhanced Equity Income Fund's Dividend Yield and Growth
As of today, Eaton Vance Enhanced Equity Income Fund currently has a 12-month trailing dividend yield of 8.10% and a 12-month forward dividend yield of 8.10%. This suggests an expectation of the same dividend payments over the next 12 months.
Over the past three years, Eaton Vance Enhanced Equity Income Fund's annual dividend growth rate was 7.20%. Extended to a five-year horizon, this rate decreased to 4.10% per year.
Based on Eaton Vance Enhanced Equity Income Fund's dividend yield and five-year growth rate, the 5-year yield on cost of Eaton Vance Enhanced Equity Income Fund stock as of today is approximately 9.90%.
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 2023-03-31, Eaton Vance Enhanced Equity Income Fund's dividend payout ratio is 0.00.
Eaton Vance Enhanced Equity Income Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Eaton Vance Enhanced Equity Income Fund's profitability 3 out of 10 as of 2023-03-31, 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. Eaton Vance Enhanced Equity 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.
Concluding Thoughts
In conclusion, while Eaton Vance Enhanced Equity Income Fund's dividend yield and consistent payment history may be appealing, the company's payout ratio, profitability, and growth metrics raise questions about the sustainability of its dividends. As such, investors should approach with caution and conduct thorough research before making investment decisions.
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