An in-depth analysis of WIW's dividend history, yield, and growth
Western Asset Inflation-Linked Opportunities and Income Fund (WIW, Financial) recently announced a dividend of $0.06 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-21. As investors anticipate this upcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Using data from GuruFocus, we delve into Western Asset Inflation-Linked Opportunities and Income Fund's dividend performance and assess its sustainability.
Understanding Western Asset Inflation-Linked Opportunities and Income Fund
Western Asset Inflation-Linked Opportunities and Income Fund is a diversified, closed-end management investment company. Its primary goal is to provide current income for its shareholders, with capital appreciation as a secondary objective.
Tracing Western Asset Inflation-Linked Opportunities and Income Fund's Dividend History
Since 2004, Western Asset Inflation-Linked Opportunities and Income Fund has maintained a consistent dividend payment record, currently distributing dividends on a monthly basis. The chart below shows the annual Dividends Per Share for tracking historical trends.
Decoding Western Asset Inflation-Linked Opportunities and Income Fund's Dividend Yield and Growth
At present, Western Asset Inflation-Linked Opportunities and Income Fund has a 12-month trailing dividend yield of 8.22% and a 12-month forward dividend yield of 8.41%. This indicates an expected increase in dividend payments over the next 12 months.
Western Asset Inflation-Linked Opportunities and Income Fund's dividend yield of 8.22% is near a 10-year high and outperforms 66.75% 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%. Over a five-year horizon, this rate decreased to 5.90% per year. The 5-year yield on cost of Western Asset Inflation-Linked Opportunities and Income Fund stock as of today is approximately 10.95%.
Is Western Asset Inflation-Linked Opportunities and Income Fund's Dividend Sustainable?
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, Western Asset Inflation-Linked Opportunities and Income Fund's dividend payout ratio is 0.00.
Western Asset Inflation-Linked Opportunities and Income Fund's profitability rank, as of 2023-05-31, is 2 out of 10, suggesting the dividend may not be sustainable. The company has reported net profit in 4 out of the past 10 years.
Future Growth Prospects
For dividends to be sustainable, a company must have robust growth metrics. Western Asset Inflation-Linked Opportunities and Income Fund's growth rank of 2 out of 10 suggests that the company has poor growth prospects, which may indicate that the dividend may not be sustainable.
Conclusion
While Western Asset Inflation-Linked Opportunities and Income Fund's consistent dividend payment record and high yield make it an attractive proposition for income investors, its low profitability and growth ranks raise questions about the sustainability of its dividends. Investors should carefully consider these factors before making investment decisions.
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