Virtus Convertible & Income Fund Announces $0.136 Dividend—Market Impact and Recovery Outlook on Ex-Dividend Date

Introduction

Virtus Convertible & Income Fund (NCV), a specialty finance company focused on providing income through a diversified portfolio of convertible securities and other fixed-income investments, has announced a cash dividend of $0.136 per share for the ex-dividend date of October 14, 2025. This consistent dividend policy aligns with the fund’s long-term strategy of generating stable income for investors. The dividend is in line with industry norms for income-focused funds and reflects strong financial performance in the most recent financial report.

As the market approaches the ex-dividend date, investors should be mindful of the typical price adjustment that occurs. The fund’s financial strength, as evidenced by its recent earnings and operating metrics, supports its ability to sustain this payout in the near term.

Dividend Overview and Context

Essential dividend metrics, such as dividend per share (DPS) and payout ratio, are critical for investors assessing dividend sustainability and performance. The most recent dividend of $0.136 per share represents a consistent distribution pattern, typical of the fund’s structure. The ex-dividend date of 2025-10-14 is the cutoff for investors to qualify for this payout.

On the ex-dividend date, the stock price typically drops by roughly the amount of the dividend, as the company's equity is adjusted to reflect the payout. This adjustment is usually reflected in the opening price of the stock on that day. Investors who purchased the stock before the ex-dividend date will receive the dividend, while those who purchase on or after this date will not.

Backtest Analysis

The backtest of NCV's historical performance around ex-dividend dates reveals a pattern of rapid price recovery. On average, the fund's stock price recovers from the dividend-induced price drop within 3.31 days, and there is an 84% probability that the price will fully recover within 15 trading days of the ex-dividend date. This demonstrates that the market efficiently absorbs the impact of the dividend, with prices normalizing quickly thereafter.

Driver Analysis and Implications

Recent financial report data provides insight into the fund’s ability to support its dividend. With net income of $19,592,000 and basic earnings per common share of $0.8672, NCV has demonstrated strong profitability. Total revenue of $11.556 million and operating income of $9.443 million further support its financial health.

The fund’s operating expense of $2.113 million, including $2.902 million in interest expense, is manageable relative to revenue, suggesting the fund is operating efficiently. This strong earnings performance indicates that the dividend is well-supported and reflects a sustainable payout strategy.

From a broader market perspective, NCV’s performance aligns with the broader trend of income-focused assets gaining traction in a low-yield environment. The fund’s consistent dividend history also reflects confidence in its capital structure and long-term income generation capabilities.

Investment Strategies and Recommendations

For short-term investors, the upcoming ex-dividend date offers an opportunity to assess market reactions. Investors who are not eligible for the dividend may still benefit from the price recovery pattern historically observed in NCV’s stock. This makes timing around the ex-dividend date a strategic consideration.

Long-term investors should focus on the fund's continued ability to generate earnings and maintain its dividend. The strong financials and stable dividend history suggest that NCV remains a compelling option for income seekers. Given the historically high recovery probability, investors may also consider holding through the ex-dividend adjustment period without concern for long-term impact.

Conclusion & Outlook

Virtus Convertible & Income Fund’s latest dividend announcement reflects its strong earnings and commitment to shareholder returns. The ex-dividend date of October 14, 2025, is likely to trigger a short-lived price adjustment, but the backtest data shows a strong likelihood of rapid recovery. Investors can use this information to make informed decisions around timing and strategy.

Looking ahead, the next earnings or dividend announcement will provide further insight into the fund's performance and sustainability. Investors should monitor these upcoming events for signals about continued strength and confidence in the fund’s business model.