Blackrock Core Bond Trust's Dividend Analysis
Understanding BHK's Dividend Performance and Sustainability
Blackrock Core Bond Trust(NYSE:BHK) recently announced a dividend of $0.08 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 look into Blackrock Core Bond Trust's dividend performance and assess its sustainability.
What Does Blackrock Core Bond Trust Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Blackrock Core Bond Trust is a closed-end management investment company. Its objective is to provide current income and capital appreciation. The trust seeks to achieve its investment objective by investing a majority of its managed assets in bonds that are investment-grade quality at the time of investment. The trust's investments will include a broad range of bonds, including corporate bonds, U.S. government and agency securities and mortgage-related securities.
A Glimpse at Blackrock Core Bond Trust's Dividend History
Blackrock Core Bond Trust has maintained a consistent dividend payment record since 2002. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Blackrock Core Bond Trust's Dividend Yield and Growth
As of today, Blackrock Core Bond Trust currently has a 12-month trailing dividend yield of 9.38% and a 12-month forward dividend yield of 9.38%. This suggests an expectation of same dividend payments over the next 12 months.
Blackrock Core Bond Trust's dividend yield of 9.38% is near a 10-year high and outperforms than 73.22 of global competitors in the Asset Management industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, Blackrock Core Bond Trust's annual dividend growth rate was 5.40%. Extended to a five-year horizon, this rate decreased to 3.40% per year.
Based on Blackrock Core Bond Trust's dividend yield and five-year growth rate, the 5-year yield on cost of Blackrock Core Bond Trust stock as of today is approximately 11.09%.
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, Blackrock Core Bond Trust's dividend payout ratio is 0.00.
Blackrock Core Bond Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Blackrock Core Bond 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 4 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Blackrock Core Bond 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
While Blackrock Core Bond Trust has a history of consistent dividend payments and a high yield, its low profitability and growth ranks raise questions about the sustainability of its dividends. It is important for investors to consider these factors when making investment decisions. 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.
