BlackRock Utility Infrastructure & Power Opportunities Trust's Dividend Analysis
An In-Depth Look into BUI's Dividend History, Yield, and Sustainability
BlackRock Utility Infrastructure & Power Opportunities Trust (NYSE:BUI) recently announced a dividend of $0.12 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 Utility Infrastructure & Power Opportunities Trust's dividend performance and assess its sustainability.
What Does BlackRock Utility Infrastructure & Power Opportunities Trust Do?
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BlackRock Utility Infrastructure & Power Opportunities Trust is a closed-end management investment company. Its investment objective is to provide total return through a combination of current income, current gains, and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its total assets in equity securities issued by companies that are engaged in the Utilities, Infrastructure and Power Opportunities business segments anywhere in the world and by employing a strategy of writing (selling) call and put options.
A Glimpse at BlackRock Utility Infrastructure & Power Opportunities Trust's Dividend History
BlackRock Utility Infrastructure & Power Opportunities Trust has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down BlackRock Utility Infrastructure & Power Opportunities Trust's Dividend Yield and Growth
As of today, BlackRock Utility Infrastructure & Power Opportunities Trust currently has a 12-month trailing dividend yield of 7.10% and a 12-month forward dividend yield of 7.10%. This suggests an expectation of the same dividend payments over the next 12 months. Based on BlackRock Utility Infrastructure & Power Opportunities Trust's dividend yield and five-year growth rate, the 5-year yield on cost of BlackRock Utility Infrastructure & Power Opportunities Trust stock as of today is approximately 7.10%.
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 Utility Infrastructure & Power Opportunities Trust's dividend payout ratio is 0.53.
BlackRock Utility Infrastructure & Power Opportunities Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks BlackRock Utility Infrastructure & Power Opportunities 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 Utility Infrastructure & Power Opportunities 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 the above analysis, prospective investors should carefully consider BlackRock Utility Infrastructure & Power Opportunities Trust's dividend payments, growth rate, payout ratio, profitability, and growth metrics before making investment decisions. While the company has a commendable dividend history, the current growth and profitability ranks suggest potential challenges in maintaining the dividend payments. Therefore, a thorough understanding of the company's financial health and future prospects is crucial for informed investment decisions.
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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.
