PIMCO Corporate & Income Opportunity Fds's Dividend Analysis
Insight into PIMCO Corporate & Income Opportunity Fds's Upcoming Dividend Payment
PIMCO Corporate & Income Opportunity Fds (NYSE:PTY) recently announced a dividend of $0.12 per share, payable on 2024-01-02, with the ex-dividend date set for 2023-12-08. 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 PIMCO Corporate & Income Opportunity Fds's dividend performance and assess its sustainability.
What Does PIMCO Corporate & Income Opportunity Fds Do?
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PIMCO Corporate & Income Opportunity Fds operates as a closed-end management investment company. It seeks to maximize total return through a combination of current income and capital appreciation. The fund invests a majority of the total assets in a combination of corporate debt obligations of varying maturities, other corporate income-producing securities, and income-producing securities of non-corporate issuers, such as U.S. Government securities, municipal securities, and mortgage-backed and other asset-backed securities issued on a public or private basis.
A Glimpse at PIMCO Corporate & Income Opportunity Fds's Dividend History
PIMCO Corporate & Income Opportunity Fds has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down PIMCO Corporate & Income Opportunity Fds's Dividend Yield and Growth
As of today, PIMCO Corporate & Income Opportunity Fds currently has a 12-month trailing dividend yield of 10.23% and a 12-month forward dividend yield of 10.23%. This suggests an expectation of same dividend payments over the next 12 months. Over the past three years, PIMCO Corporate & Income Opportunity Fds's annual dividend growth rate was -2.90%. Based on PIMCO Corporate & Income Opportunity Fds's dividend yield and five-year growth rate, the 5-year yield on cost of PIMCO Corporate & Income Opportunity Fds stock as of today is approximately 10.23%.
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, PIMCO Corporate & Income Opportunity Fds's dividend payout ratio is 1.50, which may suggest that the company's dividend may not be sustainable. PIMCO Corporate & Income Opportunity Fds's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks PIMCO Corporate & Income Opportunity Fds's profitability 3 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.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. PIMCO Corporate & Income Opportunity Fds's growth rank of 3 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Next Steps
In conclusion, while PIMCO Corporate & Income Opportunity Fds offers a high dividend yield, the company's negative dividend growth rate, elevated payout ratio, and low profitability and growth ranks raise concerns about the sustainability of its dividend payments. Investors should consider these factors carefully when evaluating the stock as a potential income investment. For those looking to find other high-dividend yield opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener to discover stocks that may better fit their investment strategy and income requirements.
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.
