Assessing the Sustainability of PGIM Global High Yield Fund, Inc's Dividend
PGIM Global High Yield Fund, Inc (GHY, Financial) recently announced a dividend of $0.11 per share, payable on 2024-01-05, with the ex-dividend date set for 2023-12-26. 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 PGIM Global High Yield Fund, Inc's dividend performance and assess its sustainability.
What Does PGIM Global High Yield Fund, Inc Do?
PGIM Global High Yield Fund, Inc is a diversified, closed-end management investment company. The fund's investment objective is to provide a high level of current income. The fund seeks to achieve this by investing in higher-rated, below-investment-grade fixed income instruments of issuers located around the world, including emerging markets.
A Glimpse at PGIM Global High Yield Fund, Inc's Dividend History
PGIM Global High Yield Fund, Inc has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down PGIM Global High Yield Fund, Inc's Dividend Yield and Growth
As of today, PGIM Global High Yield Fund, Inc currently has a 12-month trailing dividend yield of 10.82% and a 12-month forward dividend yield of 10.82%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, PGIM Global High Yield Fund, Inc's annual dividend growth rate was 2.70%. Extended to a five-year horizon, this rate increased to 5.30% per year. Based on PGIM Global High Yield Fund, Inc's dividend yield and five-year growth rate, the 5-year yield on cost of PGIM Global High Yield Fund, Inc stock as of today is approximately 14.01%.
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 2023-07-31, PGIM Global High Yield Fund, Inc's dividend payout ratio is 1.61, which may suggest that the company's dividend may not be sustainable.
PGIM Global High Yield Fund, Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks PGIM Global High Yield Fund, Inc's profitability 2 out of 10 as of 2023-07-31, suggesting the dividend may not be sustainable. The company has reported net profit in 6 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. PGIM Global High Yield Fund, Inc's growth rank of 2 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 PGIM Global High Yield Fund, Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. PGIM Global High Yield Fund, Inc's revenue has increased by approximately 86.30% per year on average, a rate that outperforms approximately 92.93% 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, PGIM Global High Yield Fund, Inc's earnings increased by approximately 92.00% per year on average, a rate that outperforms approximately 94.02% of global competitors.
Next Steps
In conclusion, PGIM Global High Yield Fund, Inc's attractive dividend yield and history of consistent payments are compelling for income-focused investors. However, the company's high payout ratio and low profitability and growth ranks raise questions about the long-term sustainability of its dividends. While the impressive revenue and EPS growth rates provide some reassurance, investors should keep a close eye on these metrics to ensure that future dividends are not at risk. For those seeking to diversify their portfolio with high-dividend-yielding stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener for informed investment decisions.
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.
