BlackRock Science and Technology Trust's Dividend Analysis
Assessing Dividend Performance and Sustainability
BlackRock Science and Technology Trust (NYSE:BST) recently announced a dividend of $0.25 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 into BlackRock Science and Technology Trust's dividend performance and assess its sustainability.
About BlackRock Science and Technology Trust
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BlackRock Science and Technology Trust is a closed-end management investment company. Its investment objective is to provide income and total return through a combination of current income, current gains, and long-term capital appreciation. It focuses on investing, under normal market conditions, in equity securities of science and technology companies.
BlackRock Science and Technology Trust's Dividend History
BlackRock Science and Technology Trust has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
BlackRock Science and Technology Trust's Dividend Yield and Growth
As of today, BlackRock Science and Technology Trust currently has a 12-month trailing dividend yield of 9.20% and a 12-month forward dividend yield of 9.20%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, BlackRock Science and Technology Trust's annual dividend growth rate was 19.50%. Extended to a five-year horizon, this rate decreased to 18.80% per year. Based on BlackRock Science and Technology Trust's dividend yield and five-year growth rate, the 5-year yield on cost of BlackRock Science and Technology Trust stock as of today is approximately 21.77%.
Is BlackRock Science and Technology Trust's Dividend Sustainable?
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 Science and Technology Trust's dividend payout ratio is 0.85, which may suggest that the company's dividend may not be sustainable.
BlackRock Science and Technology Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks BlackRock Science and Technology 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 5 years out of the past 10 years.
BlackRock Science and Technology Trust's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. BlackRock Science and Technology 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
In conclusion, while BlackRock Science and Technology Trust has a commendable dividend history and yield, its high payout ratio and low profitability and growth ranks raise concerns about the sustainability of its dividends. Investors should consider these factors before 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.
