8 Dividend Hints From The Gabelli Equity Income Fund

|
 |  Includes: DE, GPC, IBM, JNJ, KMB, KO, NEM, PFE
by: Dividend Dog

Investors seeking income could learn a lot from the Gabelli Equity Income Fund. However, investors might want to pass on the fund because of its high fees and copy its holdings instead. The Gabelli Equity Income Fund is an impressive, award-winning mutual funds which focuses on dividend stocks. This fund has been awarded four Morningstars and is rated as a five by Lipper for total return and consistent return. It offers dividend yields ranging from 0.52% to 0.56%, depending on whether investors purchase shares of GCAEX, GABEX, GCCEX, or GCBEX.

Unfortunately, the Gabelli Equity Income Fund charges expenses that range from 1.41% to 2.16%, depending on share class. These fees are charged every year and drain portfolio returns. Luckily, investors can use this award-winning fund's stock selection while avoiding recurring fees by purchasing its stock holdings directly rather than buying the fund itself. Many of the fund's stock holdings are described below:

Johnson & Johnson (NYSE:JNJ) recently traded at $65.64 per share. At this price level, the stock has a 3.5% dividend yield. For 10 out of the past 10 fiscal years, a share of JNJ paid a total of $13.73 in dividends. JNJ shareholders have seen a 0.1% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 2.9, a price-to-earnings multiple of 18.9, and a price-to-sales multiple of 2.8 (trailing twelve months). Over the past decade shareholders savored a 27.8% average annual return on equity.

Deere & Company (NYSE:DE) recently traded at $88.40 per share. At this price level, the stock has a 1.9% dividend yield. For 10 out of the past 10 fiscal years, a share of DE paid a total of $8.57 in dividends. Of these dividend payments, a total of $5.77 were paid in the last five years. DE shareholders have enjoyed a 14.3% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 5.3, a price-to-earnings multiple of 13.3, and a price-to-sales multiple of 1.1 (trailing twelve months). Over the past decade shareholders savored a 24.3% average annual return on equity.

Genuine Parts Company (NYSE:GPC) recently traded at $64.17 per share. At this price level, the stock has a 2.8% dividend yield. For 10 out of the past 10 fiscal years, a share of GPC paid a total of $13.54 in dividends. GPC shareholders have seen a 4.9% change in share price over the past year. At present, shares of this mid-cap stock trade at a price-to-book ratio of 3.5, a price-to-earnings multiple of 18.5, and a price-to-sales multiple of 0.8 (trailing twelve months). Over the past decade shareholders savored a 14.8% average annual return on equity.

International Business Machines Corp. (NYSE:IBM) recently traded at $193.64 per share. At this price level, the stock has a 1.6% dividend yield. For 10 out of the past 10 fiscal years, a share of IBM paid a total of $12.40 in dividends. IBM shareholders have seen a 5.3% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 11.3, a price-to-earnings multiple of 14.8, and a price-to-sales multiple of 2.1 (trailing twelve months). Over the past decade shareholders savored a 38.9% average annual return on equity.

Kimberly-Clark Corporation (NYSE:KMB) recently traded at $72.23 per share. At this price level, the stock has a 3.9% dividend yield. For 10 out of the past 10 fiscal years, a share of KMB paid a total of $18.52 in dividends. Of these dividend payments, a total of $11.44 were paid in the last five years. KMB shareholders have sustained a -1.8% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 5.2, a price-to-earnings multiple of 18.1, and a price-to-sales multiple of 1.4 (trailing twelve months). Over the past decade shareholders savored a 30.5% average annual return on equity.

The Coca-Cola Company (NYSE:KO) recently traded at $68.08 per share. At this price level, the stock has a 2.8% dividend yield. For 10 out of the past 10 fiscal years, a share of KO paid a total of $12.04 in dividends. KO shareholders have sustained a -2.7% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 4.7, a price-to-earnings multiple of 12.5, and a price-to-sales multiple of 3.4 (trailing twelve months). Over the past decade shareholders savored a 32.1% average annual return on equity.

Newmont Mining Corp. (NYSE:NEM) recently traded at $61.01 per share. At this price level, the stock has a 2.3% dividend yield. For 10 out of the past 10 fiscal years, a share of NEM paid a total of $3.21 in dividends. Of these dividend payments, a total of $2.10 were paid in the last five years. NEM shareholders have seen a 1.7% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 2.2, a price-to-earnings multiple of 12.9, and a price-to-sales multiple of 3.0 (trailing twelve months). Over the past decade shareholders saw a 4.5% average annual return on equity.

Pfizer Inc. (NYSE:PFE) recently traded at $21.2 per share. At this price level, the stock has a 4.2% dividend yield. For 10 out of the past 10 fiscal years, a share of PFE paid a total of $7.87 in dividends. Of these dividend payments, a total of $4.92 were paid in the last five years. PFE shareholders have sustained a -1.0% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 1.8, a price-to-earnings multiple of 16.7, and a price-to-sales multiple of 2.4 (trailing twelve months). Over the past decade shareholders savored a 19.8% average annual return on equity.

Ticker

Company

Portfolio Weight

Div Yield

(KO)

The Coca-Cola Company

2.0%

2.8%

(IBM)

International Business Machines

1.9%

1.6%

(GPC)

Genuine Parts Company

1.5%

2.8%

(PFE)

Pfizer Inc.

1.2%

4.2%

(JNJ)

Johnson & Johnson

1.2%

3.5%

(DE)

Deere & Company

1.2%

1.9%

(NEM)

Newmont Mining Corp.

1.1%

2.3%

(KMB)

Kimberly-Clark Corporation

1.0%

3.9%

Click to enlarge

Each of these firms has passed the fund's due diligence and has provided investors with long track records of dividend payments and equity returns. Direct investment in the stocks gains the advantage of the Gabelli's selection process without losing over 1% each year to fund-level fees. Income investors ought to consider investing directly in these stocks rather than investing in the Gabelli Equity Income Fund.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: This article was written to provide investor information and education, and should not be construed as investment advice. I have no idea what your individual risk, time-horizon, and tax circumstances are: please seek the personal advice of a financial planner. This article uses third-party data and may contain approximations and errors. Please check estimates and data for yourself before investing.