Blackrock Enhanced Cap&Inc Fund, Inc's Dividend Analysis
An In-depth Look at the Dividend Performance and Sustainability of Blackrock Enhanced Cap&Inc Fund, Inc
Blackrock Enhanced Cap&Inc Fund, Inc (NYSE:CII) recently announced a dividend of $0.1 per share, payable on October 31, 2023, with the ex-dividend date set for October 13, 2023. This announcement has drawn attention to the company's dividend history, yield, and growth rates. Using data from GuruFocus, this article will explore Blackrock Enhanced Cap&Inc Fund, Inc's dividend performance and assess its sustainability.
What Does Blackrock Enhanced Cap&Inc Fund, Inc Do?
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Blackrock Enhanced Cap&Inc Fund, Inc is a closed-end management investment company. Its primary goal is to provide total return through a combination of current income and capital appreciation. The company strives to achieve this objective by investing a majority of its total assets in a portfolio of equity securities of U.S. and foreign issuers.
A Glimpse at Blackrock Enhanced Cap&Inc Fund, Inc's Dividend History
Blackrock Enhanced Cap&Inc Fund, Inc has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a monthly basis. The following chart provides a historical overview of the company's annual Dividends Per Share.
Breaking Down Blackrock Enhanced Cap&Inc Fund, Inc's Dividend Yield and Growth
As of today, Blackrock Enhanced Cap&Inc Fund, Inc has a 12-month trailing dividend yield of 6.47% and a 12-month forward dividend yield of 6.47%. This suggests that investors can expect similar dividend payments over the next 12 months.
Over the past three years, Blackrock Enhanced Cap&Inc Fund, Inc's annual dividend growth rate was 6.00%. However, when extended to a five-year horizon, this rate decreased to 3.80% per year. Based on these figures, the 5-year yield on cost of Blackrock Enhanced Cap&Inc Fund, Inc stock is approximately 7.80% today.
The Sustainability Question: Payout Ratio and Profitability
To evaluate the sustainability of the dividend, it's essential to consider the company's payout ratio. The dividend payout ratio indicates the portion of earnings the company distributes as dividends. A lower ratio implies that the company retains a significant portion of its earnings, ensuring funds for future growth and unexpected downturns. As of June 30, 2023, Blackrock Enhanced Cap&Inc Fund, Inc's dividend payout ratio is 0.42.
Blackrock Enhanced Cap&Inc Fund, Inc's profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Blackrock Enhanced Cap&Inc Fund, Inc's profitability 2 out of 10 as of June 30, 2023, suggesting the dividend may not be sustainable. The company has reported net profit in 4 years out of the past 10 years.
Growth Metrics: The Future Outlook
For dividends to be sustainable, a company must exhibit robust growth metrics. Blackrock Enhanced Cap&Inc Fund, Inc's growth rank of 2 out of 10 suggests that the company has poor growth prospects, implying that the dividend may not be sustainable in the long run.
Conclusion
In conclusion, while Blackrock Enhanced Cap&Inc Fund, Inc has a history of consistent dividend payments and offers a decent yield, its low profitability and growth ranks raise questions about the sustainability of its dividends. Investors should consider these factors when making investment decisions. For those seeking high-dividend yield stocks, the High Dividend Yield Screener available to GuruFocus Premium users can be a valuable tool.
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.
