Yahoo Finance Invesco Municipal Opportunity Trust's Dividend Analysis
Assessing the Sustainability and Performance of VMO's Dividends
Invesco Municipal Opportunity Trust (NYSE:VMO) recently announced a dividend of $0.03 per share, payable on 2024-01-31, with the ex-dividend date set for 2024-01-16. 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 Invesco Municipal Opportunity Trusts dividend performance and assess its sustainability.
What Does Invesco Municipal Opportunity Trust Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Invesco Municipal Opportunity Trust is a diversified, closed-end management investment company. The investment objective of the company is to provide common shareholders with a high level of current income exempt from federal income tax, consistent with preservation of capital.
A Glimpse at Invesco Municipal Opportunity Trust's Dividend History
Invesco Municipal Opportunity Trust has maintained a consistent dividend payment record since 1992. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Invesco Municipal Opportunity Trust's Dividend Yield and Growth
As of today, Invesco Municipal Opportunity Trust currently has a 12-month trailing dividend yield of 4.49% and a 12-month forward dividend yield of 4.27%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Invesco Municipal Opportunity Trust's annual dividend growth rate was -4.20%. Extended to a five-year horizon, this rate decreased to -4.40% per year.
Based on Invesco Municipal Opportunity Trust's dividend yield and five-year growth rate, the 5-year yield on cost of Invesco Municipal Opportunity Trust stock as of today is approximately 3.59%.
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 2023-08-31, Invesco Municipal Opportunity Trust's dividend payout ratio is 0.00.
Invesco Municipal Opportunity Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Invesco Municipal Opportunity Trust's profitability 2 out of 10 as of 2023-08-31, 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. Invesco Municipal Opportunity Trust's growth rank of 2 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Final Considerations for Investors
In conclusion, while Invesco Municipal Opportunity Trust has a history of consistent dividend payments, the negative dividend growth rates and low profitability and growth ranks raise concerns about the sustainability of future dividends. Investors should weigh these factors along with the company's tax-exempt income objective and capital preservation strategy when considering VMO as a potential investment for income. For those seeking additional high-dividend yield opportunities, GuruFocus Premium users can explore the High Dividend Yield Screener for more options.
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.
This article first appeared on GuruFocus.
