Assessing the Upcoming Dividend and Financial Health of WIW
Western Asset Inflation-Linked Opportunities and Income Fund (WIW, Financial) recently announced a dividend of $0.06 per share, payable on 2024-02-29, with the ex-dividend date set for 2024-02-21. 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 Western Asset Inflation-Linked Opportunities and Income Fund's dividend performance and assess its sustainability.
What Does Western Asset Inflation-Linked Opportunities and Income Fund Do?
Western Asset Inflation-Linked Opportunities and Income Fund is a diversified, closed-end management investment company. Its primary investment objective of the group is to provide current income for its shareholders. The secondary investment objective is capital appreciation with current income.
A Glimpse at Western Asset Inflation-Linked Opportunities and Income Fund's Dividend History
Western Asset Inflation-Linked Opportunities and Income Fund has maintained a consistent dividend payment record since 2004, with dividends currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Western Asset Inflation-Linked Opportunities and Income Fund's Dividend Yield and Growth
As of today, Western Asset Inflation-Linked Opportunities and Income Fund currently has a 12-month trailing dividend yield of 8.32% and a forward dividend yield of 8.32%, suggesting an expectation of consistent dividend payments over the next 12 months. Western Asset Inflation-Linked Opportunities and Income Fund's dividend yield is near a 10-year high and outperforms 69.31% of global competitors in the Asset Management industry, making it an attractive proposition for income investors.
Over the past three years, Western Asset Inflation-Linked Opportunities and Income Fund's annual dividend growth rate was 13.60%. Extended to a five-year horizon, this rate decreased to 5.90% per year. Based on the dividend yield and five-year growth rate, the 5-year yield on cost of Western Asset Inflation-Linked Opportunities and Income Fund stock as of today is approximately 11.08%.
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. As of 2023-05-31, Western Asset Inflation-Linked Opportunities and Income Fund's dividend payout ratio is 0.00, suggesting that the current dividend may not be sustainable.
Western Asset Inflation-Linked Opportunities and Income Fund's profitability rank is 2 out of 10, indicating challenges in earnings relative to its peers and raising concerns about the sustainability of its dividends. The company has reported net profit in 4 years out of the past 10 years.
Growth Metrics: The Future Outlook
The future sustainability of dividends is also contingent on a company's growth metrics. Western Asset Inflation-Linked Opportunities and Income Fund's growth rank of 2 out of 10 indicates poor growth prospects, which may impact the reliability of future dividends.
Next Steps
In conclusion, while Western Asset Inflation-Linked Opportunities and Income Fund's dividend yield is attractive and the company has a history of consistent dividend payments, the sustainability of these dividends is uncertain. The low profitability and growth ranks, combined with a payout ratio of 0.00, suggest that the dividends could be at risk if the company's financial situation does not improve. Investors should monitor these metrics closely, especially the profitability and growth ranks, to make informed decisions about the reliability of future dividends. For those seeking high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener for further research.
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.
