Blackrock Municipal Income Trust II's Dividend Analysis
Unveiling the Dividend Performance and Sustainability of Blackrock Municipal Income Trust II
Blackrock Municipal Income Trust II (NYSE:BLE) recently announced a dividend of $0.03 per share, payable on 2023-11-01, 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 Municipal Income Trust II's dividend performance and assess its sustainability.
What Does Blackrock Municipal Income Trust II Do?
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Blackrock Municipal Income Trust II is a perpetual closed-end municipal bond fund. Its objective is to provide current income exempt from regular Federal income taxes and Maryland personal income taxes. The company's diverse platform of active (alpha) and index (beta) investment strategies across asset classes enables it to tailor investment outcomes and asset allocation solutions for clients. Blackrock's product offerings include single and multi-asset class portfolios investing in equities, fixed income, alternatives and money market instruments.
A Glimpse at Blackrock Municipal Income Trust II's Dividend History
Blackrock Municipal Income Trust II 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 Municipal Income Trust II's Dividend Yield and Growth
As of today, Blackrock Municipal Income Trust II currently has a 12-month trailing dividend yield of 4.66% and a 12-month forward dividend yield of 4.38%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Blackrock Municipal Income Trust II's annual dividend growth rate was -4.50%. Extended to a five-year horizon, this rate decreased to -7.20% per year. And over the past decade, Blackrock Municipal Income Trust II's annual dividends per share growth rate stands at -4.50%.
Based on Blackrock Municipal Income Trust II's dividend yield and five-year growth rate, the 5-year yield on cost of Blackrock Municipal Income Trust II stock as of today is approximately 3.21%.
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 2023-01-31, Blackrock Municipal Income Trust II's dividend payout ratio is 67.20. This may suggest that the company's dividend may not be sustainable.
Blackrock Municipal Income Trust II's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Blackrock Municipal Income Trust II's profitability 3 out of 10 as of 2023-01-31, suggesting the dividend may not be sustainable. The company has reported net profit in 8 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 Municipal Income Trust II'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, Blackrock Municipal Income Trust II's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics suggest potential challenges in sustaining its dividend in the long run. This analysis underscores the importance of thorough research and consideration before investing in high-dividend yield stocks. With GuruFocus's comprehensive financial tools and data, investors can make informed decisions and optimize their investment strategies.
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.
