Assessing the Sustainability and Growth Prospects of SPE's Dividends
Special Opportunities Fund Inc (SPE, Financial) recently announced a dividend of $0.09 per share, payable on 2023-11-30, with the ex-dividend date set for 2023-11-17. As investors anticipate this forthcoming payment, it's essential to examine the company's dividend history, yield, and growth rates. Using GuruFocus data, let's delve into Special Opportunities Fund Inc's dividend performance and evaluate its sustainability.
What Does Special Opportunities Fund Inc Do?
Special Opportunities Fund Inc is a US-based closed-end diversified management investment company with a primary objective of total return. The company's investment portfolio is diverse, encompassing investment companies, common stocks, money market funds, commodity partnerships, preferred stocks, convertible bonds, liquidating trusts, promissory notes, senior unsecured notes, warrants, rights, corporate notes, and corporate bonds. It also invests in various sectors, including construction materials, consumer finance, healthcare equipment and supplies, independent power and renewable electricity producers, insurance, personal products, professional services, and real estate investment trusts.
A Glimpse at Special Opportunities Fund Inc's Dividend History
Special Opportunities Fund Inc has maintained a consistent dividend payment record since 2015, with dividends currently distributed on a monthly basis. The chart below shows the annual Dividends Per Share for tracking historical trends.
Breaking Down Special Opportunities Fund Inc's Dividend Yield and Growth
As of today, Special Opportunities Fund Inc has a 12-month trailing dividend yield of 10.18% and a 12-month forward dividend yield of 9.52%. This suggests a projected decrease in dividend payments over the next 12 months. Over the past three years, the company's annual dividend growth rate was 18.60%, which remained consistent over a five-year horizon. Consequently, the 5-year yield on cost of Special Opportunities Fund Inc stock as of today is approximately 23.89%.
The Sustainability Question: Payout Ratio and Profitability
To gauge the sustainability of the dividend, it's crucial to examine the company's payout ratio. The dividend payout ratio offers insights into the portion of earnings the company allocates as dividends. A lower ratio indicates that the company retains a significant portion of its earnings, ensuring funds for future growth and unexpected downturns. As of 2023-06-30, Special Opportunities Fund Inc's dividend payout ratio is 1.01, suggesting the dividend may not be sustainable. Special Opportunities Fund Inc's profitability rank is 2 out of 10, indicating the dividend may not be sustainable considering the company has reported net profit in 4 out of the past 10 years.
Growth Metrics: The Future Outlook
For dividends to be sustainable, a company must exhibit robust growth metrics. Special Opportunities Fund Inc's growth rank of 2 out of 10 suggests poor growth prospects, indicating the dividend may not be sustainable.
Next Steps
Special Opportunities Fund Inc's dividend payments, growth rate, payout ratio, profitability, and growth metrics present a mixed picture. While the company has a consistent dividend payment record, its payout ratio and growth prospects suggest potential challenges in maintaining its dividend levels. Therefore, investors should closely monitor these factors to make informed decisions. 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.
