Nuveen Municipal High Income Opp Fund's Dividend Analysis
A Deep Dive into the Fund's Dividend Performance, Sustainability, and Future Prospects
Nuveen Municipal High Income Opp Fund (NYSE:NMZ) 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 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 look into Nuveen Municipal High Income Opp Fund's dividend performance and assess its sustainability.
What Does Nuveen Municipal High Income Opp Fund Do?
Nuveen Municipal High Income Opp Fund is a diversified, closed-end management investment company. The company's investment objectives is to provide current income exempt from regular federal income tax by investing primarily in a portfolio of municipal obligations issued by state and local government authorities or certain U.S. territories. It seeks to provide attractive monthly tax-free income, portfolio diversification and attractive after tax total returns. The fund invests in municipal securities that are exempt from federal income taxes.
A Glimpse at Nuveen Municipal High Income Opp Fund's Dividend History
Nuveen Municipal High Income Opp Fund has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Nuveen Municipal High Income Opp Fund's Dividend Yield and Growth
As of today, Nuveen Municipal High Income Opp Fund currently has a 12-month trailing dividend yield of 6.31% and a 12-month forward dividend yield of 5.66%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Nuveen Municipal High Income Opp Fund's annual dividend growth rate was 1.60%. Extended to a five-year horizon, this rate decreased to 0.20% per year. And over the past decade, Nuveen Municipal High Income Opp Fund's annual dividends per share growth rate stands at -3.00%.
Based on Nuveen Municipal High Income Opp Fund's dividend yield and five-year growth rate, the 5-year yield on cost of Nuveen Municipal High Income Opp Fund stock as of today is approximately 6.37%.
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 2023-04-30, Nuveen Municipal High Income Opp Fund's dividend payout ratio is 0.00.
Nuveen Municipal High Income Opp Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Nuveen Municipal High Income Opp Fund's profitability 3 out of 10 as of 2023-04-30, suggesting the dividend may not be sustainable. The company has reported net profit in 7 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Nuveen Municipal High Income Opp Fund's growth rank of 3 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Conclusion
While Nuveen Municipal High Income Opp Fund has a consistent dividend payment record, its decreasing dividend growth rate and low profitability and growth ranks raise questions about the sustainability of its dividends. Investors should consider these factors in their decision-making process. 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.
