Assessing the Sustainability of LDP's Upcoming Dividend
Cohen & Steers Ltd Duration Preferred & Income Fund, Inc. (LDP, Financial) recently announced a dividend of $0.13 per share, payable on 2024-02-29, with the ex-dividend date set for 2024-02-13. 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 Cohen & Steers Ltd Duration Preferred & Income Fund, Inc.'s dividend performance and assess its sustainability.
What Does Cohen & Steers Ltd Duration Preferred & Income Fund, Inc. Do?
Cohen & Steers Ltd Duration Preferred & Income Fund, Inc. is a diversified, closed-end management investment company. Its primary investment objective is high current income and capital appreciation as its secondary investment objective. The Fund invests at least 80% of its managed assets in preferred and other income securities issued by U.S. and non-U.S. companies under normal market conditions.
A Glimpse at Cohen & Steers Ltd Duration Preferred & Income Fund, Inc.'s Dividend History
Cohen & Steers Ltd Duration Preferred & Income Fund, Inc. has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Cohen & Steers Ltd Duration Preferred & Income Fund, Inc.'s Dividend Yield and Growth
As of today, Cohen & Steers Ltd Duration Preferred & Income Fund, Inc. currently has a 12-month trailing dividend yield of 8.36% and a 12-month forward dividend yield of 8.23%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Cohen & Steers Ltd Duration Preferred & Income Fund, Inc.'s annual dividend growth rate was -4.70%. Extended to a five-year horizon, this rate increased to 4.90% per year. Based on Cohen & Steers Ltd Duration Preferred & Income Fund, Inc.'s dividend yield and five-year growth rate, the 5-year yield on cost of Cohen & Steers Ltd Duration Preferred & Income Fund, Inc. stock as of today is approximately 10.62%.
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, Cohen & Steers Ltd Duration Preferred & Income Fund, Inc.'s dividend payout ratio is 27.00, which may suggest that the company's dividend may not be sustainable.
Cohen & Steers Ltd Duration Preferred & Income Fund, Inc.'s profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Cohen & Steers Ltd Duration Preferred & Income Fund, Inc.'s profitability at 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. Cohen & Steers Ltd Duration Preferred & Income 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 for Investors
Investors considering Cohen & Steers Ltd Duration Preferred & Income Fund, Inc. must weigh the attractive yield against the sustainability concerns raised by the payout ratio, profitability rank, and growth outlook. While the yield may appeal to income-focused portfolios, the underlying financial health of the company should be scrutinized to ensure long-term dividend stability. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener to find viable alternatives that balance yield with financial robustness.
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.
