This ASX 200 stock is trading near 52-week lows with a 13% dividend yield! Should you buy?

The Magellan Financial Group Ltd (ASX: MFG) share price has come under pressure in recent sessions.

Since this time last week, the ASX 200 stock has lost 14% of its value.

This means the fund manager’s shares are now down 30% over the last 12 months and are not too far away from their 52-week low.

In addition, with Magellan’s shares down heavily, the trailing dividend yield on offer with them has ballooned to a whopping 13.75%.

Does this ASX 200 stock really have a 13% yield?

As things stand, Magellan shares really do have a trailing 13%+ dividend yield.

However, the keyword in that sentence is “trailing”. This refers to what has already been paid to shareholders over the last 12 months and not what lies ahead for them.

Magellan’s shares have fallen heavily over the last 12 months because it continues to bleed funds under management (FUM) each month. Combined with a poor performance from its funds, this is hurting its profitability and means it is highly unlikely that its dividend will be sustainable at current levels.

Dividend outlook

The team at Macquarie expects the company to be forced to slash its dividend to just 50.2 cents per share in FY 2024. That’s less than half what it has paid over the last 12 months.

Based on this estimate, the ASX 200 stock has an FY 2024 dividend yield of approximately 6%.

While this is certainly attractive for income investors, there’s no guarantee that a dividend of this size will be paid. Nor is there any guarantee that Magellan’s performance will improve any time soon. This could lead to its shares falling further, putting your investment underwater even after dividends.

Investors would likely be better off buying an ASX 200 stock with a positive outlook and growing dividend.

Macquarie appears to agree. It has an underperform rating and a $7.25 price target on Magellan’s shares. This suggests that they could fall 14% from current levels.