An in-depth analysis of the fund's dividend history, growth, and sustainability
Cushing® NextGen Infrastructure Income Fund (NXG, Financial) recently announced a dividend of $0.54 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 deep dive into Cushing® NextGen Infrastructure Income Funds dividend performance and assess its sustainability.
Company Overview: Cushing® NextGen Infrastructure Income Fund
Cushing NextGen Infrastructure Income Fund is a closed-end investment management company. Its investment objective is to seek a high total return with a focus on current income. The Fund invests at least 80% of its net assets in a portfolio of equity and debt securities of infrastructure companies, including energy infrastructure companies, industrial infrastructure companies, sustainable infrastructure companies, and technology & communication infrastructure companies.
Tracing Cushing® NextGen Infrastructure Income Fund's Dividend History
Cushing® NextGen Infrastructure Income Fund has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dissecting Cushing® NextGen Infrastructure Income Fund's Dividend Yield and Growth
As of today, Cushing® NextGen Infrastructure Income Fund currently has a 12-month trailing dividend yield of 7.29% and a 12-month forward dividend yield of 15.99%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Cushing® NextGen Infrastructure Income Fund's annual dividend growth rate was -26.90%. Extended to a five-year horizon, this rate increased to -21.40% per year. Based on Cushing® NextGen Infrastructure Income Fund's dividend yield and five-year growth rate, the 5-year yield on cost of Cushing® NextGen Infrastructure Income Fund stock as of today is approximately 2.19%.
Assessing Dividend Sustainability: 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 2023-05-31, Cushing® NextGen Infrastructure Income Fund's dividend payout ratio is 0.00.
Cushing® NextGen Infrastructure Income Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Cushing® NextGen Infrastructure Income Fund's profitability 3 out of 10 as of 2023-05-31, suggesting the dividend may not be sustainable. The company has reported net profit in 4 years out of past 10 years.
Future Growth Prospects
To ensure the sustainability of dividends, a company must have robust growth metrics. Cushing® NextGen Infrastructure Income 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: A Closer Look at Cushing® NextGen Infrastructure Income Fund's Dividend Dynamics
While Cushing® NextGen Infrastructure Income Fund has a history of consistent dividend payments, its negative growth rate and low profitability rank raise questions about the sustainability of its dividends. The fund's payout ratio of 0.00 and a growth rank of 3 out of 10 further suggest that it may struggle to maintain its dividend payments in the future. Therefore, investors should exercise caution and conduct further research before investing in this fund for its dividends.
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