Blackrock Enhanced International Dividend Trust's Dividend Analysis
Unraveling the Dividend Performance and Sustainability of Blackrock Enhanced International Dividend Trust
Blackrock Enhanced International Dividend Trust (NYSE:BGY) recently announced a dividend of $0.03 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 deeper into Blackrock Enhanced International Dividend Trust's dividend performance and assess its sustainability.
What Does Blackrock Enhanced International Dividend Trust Do?
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Blackrock Enhanced International Dividend Trust aims to provide current income and gains, with a secondary objective of long-term capital appreciation. The Trust seeks to achieve its objectives by investing in equity securities of companies engaged in the energy and natural resources business and equity derivatives with exposure to the energy and natural resources industry.
A Glimpse at Blackrock Enhanced International Dividend Trust's Dividend History
Blackrock Enhanced International Dividend Trust has maintained a consistent dividend payment record since 2007. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Blackrock Enhanced International Dividend Trust's Dividend Yield and Growth
As of today, Blackrock Enhanced International Dividend Trust currently has a 12-month trailing dividend yield of 8.17% and a 12-month forward dividend yield of 8.17%. This suggests an expectation of the same dividend payments over the next 12 months.
Extended to a five-year horizon, this rate decreased to -2.30% per year. Based on Blackrock Enhanced International Dividend Trust's dividend yield and five-year growth rate, the 5-year yield on cost of Blackrock Enhanced International Dividend Trust stock as of today is approximately 7.27%.
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 Enhanced International Dividend Trust's dividend payout ratio is 0.42.
Blackrock Enhanced International Dividend Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Blackrock Enhanced International Dividend 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 the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Blackrock Enhanced International Dividend 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.
Next Steps
Given Blackrock Enhanced International Dividend Trust's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, investors should proceed with caution. While the dividend yield may be attractive, the sustainability of these payments is questionable due to the company's low profitability and growth ranks. Investors should consider these factors while 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.
