Nuveen California Quality Municipal Income Fund's Dividend Analysis
Assessing the Sustainability and Growth of NAC's Dividends
Nuveen California Quality Municipal Income Fund (NYSE:NAC) recently announced a dividend of $0.04 per share, payable on 2023-11-01, with the ex-dividend date set for 2023-10-12. As investors anticipate this upcoming payment, attention is also drawn to the company's dividend history, yield, and growth rates. Utilizing data from GuruFocus, we delve into Nuveen California Quality Municipal Income Fund's dividend performance and evaluate its sustainability.
Understanding Nuveen California Quality Municipal Income Fund's Operations
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Nuveen California Quality Municipal Income Fund is a diversified closed-end management investment company. Its primary objective is to provide current income exempt from regular federal and California income tax while enhancing portfolio value relative to the municipal bond market. This is achieved by investing in tax-exempt municipal bonds that the Fund's investment adviser believes are underrated or undervalued, or that represent municipal market sectors that are undervalued.
Historical Dividend Performance of Nuveen California Quality Municipal Income Fund
Since 1999, Nuveen California Quality Municipal Income Fund has maintained a consistent dividend payment record, distributing dividends on a monthly basis. The following chart illustrates the annual Dividends Per Share for tracking historical trends.
Dissecting Nuveen California Quality Municipal Income Fund's Dividend Yield and Growth
As of today, Nuveen California Quality Municipal Income Fund boasts a 12-month trailing dividend yield of 4.74% and a 12-month forward dividend yield of 4.48%. This suggests an expected decrease in dividend payments over the next 12 months.
Over the past three years, the company's annual dividend growth rate was -5.00%. When extended to a five-year horizon, this rate increases slightly to -4.60% per year. Given these rates, the 5-year yield on cost of Nuveen California Quality Municipal Income Fund stock as of today is approximately 3.75%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
Understanding the sustainability of dividends requires an evaluation of the company's payout ratio. The dividend payout ratio gives 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, ensuring funds for future growth and unexpected downturns. As of 2023-02-28, Nuveen California Quality Municipal Income Fund's dividend payout ratio is 0.00.
The company's profitability rank offers an understanding of its earnings prowess relative to its peers. As of 2023-02-28, GuruFocus ranks Nuveen California Quality Municipal Income Fund's profitability 1 out of 10, suggesting the dividend may not be sustainable in the long run. The company has reported net profit in 3 out of the past 10 years.
Considering Growth Metrics for Future Dividend Sustainability
To ensure the sustainability of dividends, a company must exhibit robust growth metrics. Nuveen California Quality Municipal Income Fund's growth rank of 1 out of 10 suggests poor growth prospects, which may affect the sustainability of dividends.
Concluding Thoughts on Nuveen California Quality Municipal Income Fund's Dividend Sustainability
In conclusion, while Nuveen California Quality Municipal Income Fund has a consistent history of dividend payments, the company's low profitability and growth ranks, along with its negative dividend growth rate, raise concerns about the sustainability of its dividends. Investors should consider these factors carefully 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.
