Assessing Dividend Performance and Sustainability
Blackrock Enhanced Global Dividend Trust (BOE, Financial) recently announced a dividend of $0.06 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 Enhanced Global Dividend Trust's dividend performance and assess its sustainability.
What Does Blackrock Enhanced Global Dividend Trust Do?
Blackrock Enhanced Global Dividend Trust has an investment objective to provide current income and current gains, with a secondary investment objective of long-term capital appreciation. The Trust focuses on investing in a portfolio of equity securities and utilizes an option writing strategy in an effort to seek total return performance and enhance distributions.
A Glimpse at Blackrock Enhanced Global Dividend Trust's Dividend History
Blackrock Enhanced Global Dividend Trust has maintained a consistent dividend payment record since 2005, with dividends currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Blackrock Enhanced Global Dividend Trust's Dividend Yield and Growth
As of today, Blackrock Enhanced Global Dividend Trust currently has a 12-month trailing dividend yield of 7.99% and a 12-month forward dividend yield of 7.99%. This suggests an expectation of same dividend payments over the next 12 months. However, when extended to a five-year horizon, this rate decreased to -3.80% per year. Based on these figures, the 5-year yield on cost of Blackrock Enhanced Global Dividend Trust stock as of today is approximately 6.58%.
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 Enhanced Global Dividend Trust's dividend payout ratio is 0.64.
Blackrock Enhanced Global Dividend Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Blackrock Enhanced Global Dividend Trust's profitability 2 out of 10 as of 2023-06-30, suggesting that 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 Enhanced Global Dividend 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.
Conclusion
While Blackrock Enhanced Global Dividend Trust has a consistent dividend payment history, its current dividend yield, payout ratio, and profitability rank raise questions about the sustainability of future dividends. The company's poor growth prospects further underscore these concerns. Therefore, investors should exercise caution and conduct thorough research before investing in Blackrock Enhanced Global Dividend Trust for its dividends.
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.
