First Trust High Income Long/Short Fund's Dividend Analysis
Assessing the Sustainability of First Trust High Income Long/Short Fund's Dividend
First Trust High Income Long/Short Fund (NYSE:FSD) recently announced a dividend of $0.11 per share, payable on January 16, 2024, with the ex-dividend date set for January 2, 2024. 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 First Trust High Income Long/Short Fund's dividend performance and assess its sustainability.
What Does First Trust High Income Long/Short Fund Do?
First Trust High Income Long/Short Fund is a diversified, closed-end management investment company based in the United States. The fund's aim is to provide a high current income to its investors. Its secondary objective is capital appreciation. It seeks to achieve its objectives by investing in a diversified portfolio in the United States. The fund holds an interest in various sectors, such as basic industry, healthcare, capital goods, telecommunications, automotive, banking, media, energy, leisure, insurance, technology and electronics, transportation, and financial services.
A Glimpse at First Trust High Income Long/Short Fund's Dividend History
First Trust High Income Long/Short Fund has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down First Trust High Income Long/Short Fund's Dividend Yield and Growth
As of today, First Trust High Income Long/Short Fund currently has a 12-month trailing dividend yield of 10.42% and a 12-month forward dividend yield of 10.42%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, First Trust High Income Long/Short Fund's annual dividend growth rate was -0.50%. Extended to a five-year horizon, this rate stayed the same. Based on First Trust High Income Long/Short Fund's dividend yield and five-year growth rate, the 5-year yield on cost of First Trust High Income Long/Short Fund stock as of today is approximately 10.14%.
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 April 30, 2023, First Trust High Income Long/Short Fund's dividend payout ratio is 0.00.