Cohen & Steers Select Preferred & Income Fund Announces $0.126 Dividend – Market Impact on Ex-Dividend Date

Introduction

Cohen & Steers Select Preferred & Income Fund (PSF) has announced a cash dividend of $0.126 per share, with the ex-dividend date set for August 12, 2025. As a preferred and income fund, PSF is known for its consistent dividend policy, which is in line with broader market expectations for income-focused equities. With a recent financial performance showing strong net income and positive operating metrics, the dividend appears well-supported. Investors are keen to assess the short-term price impact and longer-term implications of this payout in the current market environment.

Dividend Overview and Context

The cash dividend of $0.126 per share reflects the fund’s commitment to generating consistent returns for income-focused investors. The ex-dividend date of August 12, 2025, marks the cutoff point for investors to be eligible for the distribution. On this date, the stock price is typically adjusted downward to reflect the payout, creating a temporary price drop. This mechanism ensures fair valuation for all shareholders and prevents potential arbitrage.

For PSF, the ex-dividend adjustment is expected to be modest given its preferred structure and relatively high yields. Investors should note that the stock price may dip slightly on the ex-dividend date, though the impact is generally short-lived and does not necessarily reflect a fundamental decline in the company’s value.

Backtest Analysis

The historical backtest of PSF shows that the fund typically recovers from its ex-dividend price drop within an average of 3.54 days, with an 87% probability of full recovery within 15 days. This pattern suggests a strong resilience in the fund's price behavior following dividend events.

The backtest methodology includes a historical analysis of PSF’s price performance around past ex-dividend dates, factoring in reinvestment assumptions and market conditions. The results highlight PSF’s ability to retain and regain value quickly after the ex-dividend date, reinforcing its appeal to income investors seeking predictable returns.

Driver Analysis and Implications

The latest financial report indicates that PSF posted a net income of $32.42 million, with total revenue of $24.21 million. The fund's operating income was $20.95 million, suggesting strong earnings performance and financial stability. The total interest expense of $7.67 million was offset by the operating income, leading to a robust net income.

The dividend payout ratio—though not directly provided—can be inferred to be within sustainable limits based on the fund's net income and earnings per share. This supports the likelihood of continued dividend sustainability and potentially future increases.

In the broader market, PSF’s performance aligns with a trend of income-oriented investors favoring high-yield, liquid instruments, especially in a low-interest-rate environment. The fund’s performance and dividend policy make it an attractive option for investors seeking stable and predictable cash flows.

Investment Strategies and Recommendations

For short-term investors, the ex-dividend date can represent an opportunity to buy in at a potentially lower price, capitalizing on the expected rapid recovery. This is supported by the backtest's results showing an 87% probability of recovery within 15 days.

Long-term investors should focus on the fund's consistent earnings, robust net income, and sustainable dividend policy. Reinvesting the dividend can enhance compounding returns, particularly in tax-advantaged accounts.

Conclusion & Outlook

The Cohen & Steers Select Preferred & Income Fund’s dividend announcement underscores its role as a reliable income source for investors. With the ex-dividend date set for August 12, 2025, the market can expect a short-term price drop, followed by a likely quick recovery.

Upcoming events, such as the next earnings announcement, will be key to monitoring the fund’s ongoing financial health and future dividend potential.