An In-depth Look at DSU's Dividend Performance and Sustainability
Blackrock Debt Strategies Fund Inc (DSU, Financial) recently announced a dividend of $0.09 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 look into Blackrock Debt Strategies Fund Inc's dividend performance and assess its sustainability.
What Does Blackrock Debt Strategies Fund Inc Do?
Blackrock Debt Strategies Fund Inc is a diversified, closed-end management investment company. Its investment objective is to provide current income by investing primarily in a diversified portfolio of U.S. companies' debt instruments, including corporate loans. The fund's secondary investment objective is to provide capital appreciation.
A Glimpse at Blackrock Debt Strategies Fund Inc's Dividend History
Blackrock Debt Strategies Fund Inc has maintained a consistent dividend payment record since 1998. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Blackrock Debt Strategies Fund Inc's Dividend Yield and Growth
As of today, Blackrock Debt Strategies Fund Inc currently has a 12-month trailing dividend yield of 9.52% and a 12-month forward dividend yield of 10.67%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Blackrock Debt Strategies Fund Inc's annual dividend growth rate was -2.30%.
Based on Blackrock Debt Strategies Fund Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Blackrock Debt Strategies Fund Inc stock as of today is approximately 9.52%.
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 Debt Strategies Fund Inc's dividend payout ratio is 0.65.
Blackrock Debt Strategies Fund Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Blackrock Debt Strategies Fund Inc's profitability 2 out of 10 as of 2023-06-30, suggesting 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 Debt Strategies Fund Inc's growth rank of 2 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Next Steps
In conclusion, while Blackrock Debt Strategies Fund Inc has a consistent history of dividend payments, its negative growth rate, high payout ratio, and low profitability and growth ranks raise questions about the sustainability of its dividends. Investors should consider these factors before deciding to invest in DSU 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.
