Nuveen Preferred & Income Securities Fund's Dividend Analysis
An In-depth Look at the Dividend Performance and Sustainability of Nuveen Preferred & Income Securities Fund
Nuveen Preferred & Income Securities Fund (NYSE:JPS) 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 forthcoming payment, it's important to examine the company's dividend history, yield, and growth rates. Using data from GuruFocus, we will delve into Nuveen Preferred & Income Securities Fund's dividend performance and assess its sustainability.
Overview of Nuveen Preferred & Income Securities Fund
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Nuveen Preferred & Income Securities Fund is a diversified closed-end management investment company. Its primary investment objective is to provide high current income consistent with capital preservation. The Fund's secondary investment objective is to enhance portfolio value. The Fund invests its managed assets in preferred securities, debt securities, including debt securities and convertible preferred securities.
Historical Dividend Performance of Nuveen Preferred & Income Securities Fund
Since 2002, Nuveen Preferred & Income Securities Fund has maintained a consistent dividend payment record. The dividends are currently distributed on a monthly basis. The chart below shows the annual Dividends Per Share for tracking historical trends.
Analyzing Nuveen Preferred & Income Securities Fund's Dividend Yield and Growth
As of today, Nuveen Preferred & Income Securities Fund has a 12-month trailing dividend yield of 7.98% and a 12-month forward dividend yield of 7.56%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, the fund's annual dividend growth rate was -4.60%. Extended to a five-year horizon, this rate decreased to -5.00% per year. Based on these factors, the 5-year yield on cost of Nuveen Preferred & Income Securities Fund stock as of today is approximately 6.17%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
To assess the sustainability of the dividend, it's crucial 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, Nuveen Preferred & Income Securities Fund's dividend payout ratio is 0.00. Concurrently, the fund's profitability rank, which offers an understanding of the company's earnings prowess relative to its peers, is 2 out of 10 as of 2023-01-31. This suggests the dividend may not be sustainable, as 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. However, Nuveen Preferred & Income Securities Fund's growth rank of 2 out of 10 suggests that the company has poor growth prospects. Thus, the dividend may not be sustainable in the long run.
Concluding Thoughts
Considering the fund's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, investors should approach Nuveen Preferred & Income Securities Fund with caution. While the fund has maintained a consistent dividend payment record, its negative growth rate and low profitability rank may pose a risk to dividend sustainability. Therefore, investors should thoroughly analyze these factors before making an investment decision.
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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.
