BlackRock Capital Allocation Trust's Dividend Analysis
Assessing Dividend Performance and Sustainability
BlackRock Capital Allocation Trust (NYSE:BCAT) recently announced a dividend of $0.13 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-13. 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 delve into BlackRock Capital Allocation Trust's dividend performance and assess its sustainability.
Understanding BlackRock Capital Allocation Trust
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BlackRock Capital Allocation Trust is a non-diversified, closed-end management investment company. The firm aims to provide total return and income through a combination of current income, current gains, and long-term capital appreciation.
BlackRock Capital Allocation Trust's Dividend History
BlackRock Capital Allocation Trust has maintained a consistent dividend payment record since 2020. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
BlackRock Capital Allocation Trust's Dividend Yield and Growth
As of today, BlackRock Capital Allocation Trust currently has a 12-month trailing dividend yield of 9.92% and a 12-month forward dividend yield of 10.57%. This suggests an expectation of increased dividend payments over the next 12 months.
BlackRock Capital Allocation Trust's dividend yield of 9.92% is near a 10-year high and outperforms 77.36% of global competitors in the Asset Management industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Based on BlackRock Capital Allocation Trust's dividend yield and five-year growth rate, the 5-year yield on cost of BlackRock Capital Allocation Trust stock as of today is approximately 9.92%.
Assessing Dividend Sustainability: 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, BlackRock Capital Allocation Trust's dividend payout ratio is 0.97, which may suggest that the company's dividend may not be sustainable.
BlackRock Capital Allocation Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks BlackRock Capital Allocation Trust's profitability 2 out of 10 as of 2023-06-30, suggesting the dividend may not be sustainable. The company has reported net profit in 2 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. BlackRock Capital Allocation 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
In conclusion, while BlackRock Capital Allocation Trust offers an attractive dividend yield, the sustainability of its dividends is questionable due to the high payout ratio, low profitability rank, and poor growth metrics. Investors should therefore exercise caution and consider these factors before making an investment decision. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
This article first appeared on GuruFocus.
