An Insightful Look at the Dividend Performance and Sustainability of Nuveen Municipal Credit Income Fund (NZF, Financial)
Nuveen Municipal Credit Income Fund (NZF) recently announced a dividend of $0.04 per share, payable on 2023-11-01, with the ex-dividend date set for 2023-10-12. 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 Nuveen Municipal Credit Income Fund's dividend performance and assess its sustainability.
What Does Nuveen Municipal Credit Income Fund Do?
Nuveen Municipal Credit Income Fund is a diversified, closed-end management investment company. Its investment objective is to provide current income exempt from regular federal income tax by investing in an actively managed portfolio of tax-exempt municipal securities.
A Glimpse at Nuveen Municipal Credit Income Fund's Dividend History
Nuveen Municipal Credit Income Fund has maintained a consistent dividend payment record since 2001. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Nuveen Municipal Credit Income Fund's Dividend Yield and Growth
As of today, Nuveen Municipal Credit Income Fund currently has a 12-month trailing dividend yield of 4.66% and a 12-month forward dividend yield of 4.92%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Nuveen Municipal Credit Income Fund's annual dividend growth rate was -3.30%. Extended to a five-year horizon, this rate increased to -2.70% per year. And over the past decade, Nuveen Municipal Credit Income Fund's annual dividends per share growth rate stands at -0.90%.
Based on Nuveen Municipal Credit Income Fund's dividend yield and five-year growth rate, the 5-year yield on cost of Nuveen Municipal Credit Income Fund stock as of today is approximately 4.06%.
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 2023-04-30, Nuveen Municipal Credit Income Fund's dividend payout ratio is 0.00.
Nuveen Municipal Credit Income Fund's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Nuveen Municipal Credit Income Fund's profitability 3 out of 10 as of 2023-04-30, suggesting the dividend may not be sustainable. The company has reported net profit in 7 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Nuveen Municipal Credit 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.
Next Steps
In conclusion, while Nuveen Municipal Credit Income Fund has a consistent dividend payment history and a reasonable yield, the negative dividend growth rate, low profitability rank, and poor growth rank indicate potential challenges in sustaining the dividend in the future. Therefore, investors should carefully consider these factors before making an investment decision. 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.
