BlackRock Corporate High Yield Fund Inc's Dividend Analysis
An in-depth look into the dividend performance and sustainability of BlackRock Corporate High Yield Fund Inc (NYSE:HYT)
BlackRock Corporate High Yield Fund Inc(NYSE:HYT) 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 Corporate High Yield Fund Inc's dividend performance and assess its sustainability.
What Does BlackRock Corporate High Yield Fund Inc Do?
BlackRock Corporate High Yield Fund Inc is a diversified, closed-end management investment company. Its investment objective is to provide shareholders with current income and capital appreciation. The trust's secondary investment objective is to provide shareholders with capital appreciation. It seeks to achieve its objectives by investing primarily in a diversified portfolio of fixed-income securities.
A Glimpse at BlackRock Corporate High Yield Fund Inc's Dividend History
BlackRock Corporate High Yield Fund Inc has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down BlackRock Corporate High Yield Fund Inc's Dividend Yield and Growth
As of today, BlackRock Corporate High Yield Fund Inc currently has a 12-month trailing dividend yield of 10.97% and a 12-month forward dividend yield of 10.97%. This suggests an expectation of the same dividend payments over the next 12 months.
Over the past three years, BlackRock Corporate High Yield Fund Inc's annual dividend growth rate was 2.70%. Extended to a five-year horizon, this rate stayed the same. Based on BlackRock Corporate High Yield Fund Inc's dividend yield and five-year growth rate, the 5-year yield on cost of BlackRock Corporate High Yield Fund Inc stock as of today is approximately 12.53%.
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 Corporate High Yield Fund Inc's dividend payout ratio is 0.93. This may suggest that the company's dividend may not be sustainable.
BlackRock Corporate High Yield Fund Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks BlackRock Corporate High Yield Fund Inc's profitability 3 out of 10 as of 2023-06-30, suggesting the dividend may not be sustainable. The company has reported net profit in 5 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 Corporate High Yield Fund Inc's growth rank of 3 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Next Steps
In conclusion, while BlackRock Corporate High Yield Fund Inc has maintained a consistent dividend payment record, its high payout ratio, mediocre profitability rank, and poor growth prospects raise concerns about the sustainability of its dividends. It is crucial for potential investors to 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.
