Exploring the Sustainability and Growth of VOC Energy Trust's Dividends

VOC Energy Trust (NYSE:VOC) recently announced a dividend of $0.23 per share, payable on 2023-11-14, with the ex-dividend date set for 2023-10-27. 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 VOC Energy Trusts dividend performance and assess its sustainability.

What Does VOC Energy Trust Do?

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VOC Energy Trust is a statutory trust. It is created to acquire and hold a term net profits interest for the benefit of the Trust unitholders. The underlying properties include VOC Brazos' net interests which are located in the states of Kansas and Texas. The trust is entitled to receive most of the net proceeds from the sale of production of oil and natural gas attributable to the underlying properties.

A Glimpse at VOC Energy Trust's Dividend History

VOC Energy Trust has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down VOC Energy Trust's Dividend Yield and Growth

As of today, VOC Energy Trust currently has a 12-month trailing dividend yield of 11.72% and a 12-month forward dividend yield of 10.17%. This suggests an expectation of decrease dividend payments over the next 12 months.

Over the past three years, VOC Energy Trust's annual dividend growth rate was 22.40%. Extended to a five-year horizon, this rate decreased to 7.70% per year. And over the past decade, VOC Energy Trust's annual dividends per share growth rate stands at -10.40%.

Based on VOC Energy Trust's dividend yield and five-year growth rate, the 5-year yield on cost of VOC Energy Trust stock as of today is approximately 16.98%.

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 2023-06-30, VOC Energy Trust's dividend payout ratio is 1.00. This may suggest that the company's dividend may not be sustainable.