An In-Depth Look at Special Opportunities Fund Inc's Upcoming Dividend
Special Opportunities Fund Inc (SPE, Financial) recently announced a dividend of $0.10 per share, payable on February 29, 2024, with the ex-dividend date set for February 16, 2024. 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 Special Opportunities Fund Inc's dividend performance and assess its sustainability.
What Does Special Opportunities Fund Inc Do?
Special Opportunities Fund Inc is a United States-based closed-end diversified management investment company. Its investment objective is to achieve total return. The company's investment portfolio consists of a variety of assets, including investment companies, common stocks, money market funds, commodity partnerships, and more, spanning across various industries from healthcare to 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. Below is a chart showing 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 currently has a 12-month trailing dividend yield of 8.69% and a 12-month forward dividend yield of 9.52%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Special Opportunities Fund Inc's annual dividend growth rate was 18.60%. Extended to a five-year horizon, this rate remained the same. Based on Special Opportunities Fund Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Special Opportunities Fund Inc stock as of today is approximately 20.39%.
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 June 30, 2023, Special Opportunities Fund Inc's dividend payout ratio is 1.01, which may suggest that the company's dividend may not be sustainable.
Special Opportunities Fund Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Special Opportunities Fund Inc's profitability 2 out of 10 as of June 30, 2023, 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. Special Opportunities 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 Special Opportunities Fund Inc's high dividend yield and growth rate over the past years may appear attractive, the sustainability of its dividends is questionable given the high payout ratio and low profitability and growth ranks. Investors should consider these factors along with their investment strategy when evaluating the potential of Special Opportunities Fund Inc's dividends. For those seeking high-dividend yield stocks, GuruFocus Premium users can screen for opportunities 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.
