A Comprehensive Analysis of KTF's Dividend History, Growth, and Future Prospects
DWS Municipal Income Trust (KTF, Financial) recently announced a dividend of $0.02 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-15. 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 DWS Municipal Income Trust's dividend performance and assess its sustainability.
A Snapshot of DWS Municipal Income Trust's Operations
DWS Municipal Income Trust is a closed-end, diversified investment management company. The investment objective is to provide high current income exempt from federal income tax by investing in a diversified portfolio of investment-grade tax-exempt securities. Its products include ETFs, Mutual Funds, Closed-End-Funds, Money Market Funds, and others.
Looking Back at DWS Municipal Income Trust's Dividend History
DWS Municipal Income Trust has maintained a consistent dividend payment record since 1989. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dissecting DWS Municipal Income Trust's Dividend Yield and Growth
As of today, DWS Municipal Income Trust currently has a 12-month trailing dividend yield of 4.10% and a 12-month forward dividend yield of 3.45%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, DWS Municipal Income Trust's annual dividend growth rate was -6.60%. Extended to a five-year horizon, this rate decreased to -10.20% per year. Based on DWS Municipal Income Trust's dividend yield and five-year growth rate, the 5-year yield on cost of DWS Municipal Income Trust stock as of today is approximately 2.39%.
Can DWS Municipal Income Trust's Dividend Payout be Sustained?
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 2023-05-31, DWS Municipal Income Trust's dividend payout ratio is 0.00.
DWS Municipal Income Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks DWS Municipal Income Trust's profitability 2 out of 10 as of 2023-05-31, suggesting the dividend may not be sustainable. The company has reported net profit in 4 years out of past 10 years.
Assessing DWS Municipal Income Trust's Growth Prospects
To ensure the sustainability of dividends, a company must have robust growth metrics. DWS Municipal Income Trust's growth rank of 2 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Conclusion
Despite DWS Municipal Income Trust's consistent dividend history, the negative dividend growth rate, low profitability rank, and poor growth rank raise concerns about the sustainability of its dividend payments. Investors need to tread carefully and evaluate other factors before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
