Cohen & Steers Ltd Duration Preferred & Income Fund Announces $0.131 Dividend as Ex-Dividend Date Nears on 2025-09-09

Introduction

Cohen & Steers Ltd Duration Preferred & Income Fund (LDP) has continued its consistent dividend policy by announcing a cash dividend of $0.131 per share. As the ex-dividend date approaches on September 9, 2025, investors are closely monitoring how the market will respond to this income-focused security. LDP, which focuses on a diversified portfolio of preferred securities and other income-generating instruments, aligns with a broader trend among BDCs and closed-end funds to maintain stable payouts. The latest financial report reflects strong operational performance, with $31.02 million in total revenue and $19.30 million in operating income, suggesting financial strength that supports its current dividend.

Dividend Overview and Context

A cash dividend of $0.131 per share represents a critical touchpoint for income-seeking investors. As the stock moves ex-dividend, the share price is expected to adjust by roughly the dividend amount, barring any significant external market shocks. The ex-dividend date of September 9, 2025, marks the first day investors must purchase the stock to no longer be entitled to the dividend, potentially influencing short-term trading behavior. This event often triggers a small price drop on the first trading day post-ex-dividend, but historical data for LDP suggests a swift recovery.

Backtest Analysis

Based on a backtest of 16 dividend events, the average price recovery duration for LDP is approximately 1.85 days, with an 81% probability of recovery within 15 days. These results indicate that the market efficiently adjusts to the ex-dividend event, allowing investors to reenter positions quickly if desired. This trend supports the use of a short-term reentry strategy for those who sold ahead of the ex-dividend date for tax or capital management purposes.

Driver Analysis and Implications

The latest financial report highlights a robust income generation model for LDP. With a total basic earnings per common share of $0.9396, the fund’s ability to sustain the current $0.131 dividend is well-supported by earnings. This results in a payout ratio of approximately 14% (dividend per share / earnings per share), indicating a conservative and sustainable payout. Additionally, net income of $27.32 million and strong operating income of $27.26 million underscore LDP's capacity to maintain or even grow its dividend in the near term.

From a macroeconomic perspective, LDP’s focus on preferred securities aligns well with an environment of rising interest rates, where fixed-income instruments can offer more attractive yields. The fund’s expense management, particularly in interest expense and administrative costs, also contributes to its operational efficiency, supporting long-term dividend sustainability.

Investment Strategies and Recommendations

For short-term investors, timing trades around the ex-dividend date remains a viable strategy, especially given the historical rapid price recovery. Investors who aim to collect the dividend should ensure ownership by the close of the previous trading day. Those who sell before the ex-dividend date may consider reentering the stock within 1.85 days, based on the backtest average recovery time.

For long-term holders, LDP's low payout ratio and consistent earnings suggest that the fund is positioned to offer reliable income with potential for modest growth. Diversifying holdings across dividend-paying funds like LDP can help income-focused portfolios manage volatility while maintaining yield.

Conclusion & Outlook

Cohen & Steers Ltd Duration Preferred & Income Fund's upcoming ex-dividend date on September 9, 2025, reflects a well-supported dividend policy grounded in strong earnings and expense management. Investors can expect a typical price adjustment followed by a swift market recovery. Looking ahead, upcoming events such as the next earnings report will offer additional insights into LDP's financial health and future payout potential.