9 Dividend Stocks From The Gabelli Equity Income Fund

by: MyPlanIQ

Mario Gabelli manages Gabelli Equity Income fund (GABEX). Gabelli is a well known stock picker who likes out of favor stocks that have substantial 'private market values.' He does not use price earnings ratios alone and cares more about a company's underlying business and cash flow.

As a result, GABEX has been doing well. The following are the top holdings of the fund:

Company Symbol % Assets
Swedish Match AB SWMA.PK 2.33
Coca-Cola Company (The) Common KO 1.98
Kraft Foods Inc. Common Stock KFT 1.94
International Business Machines IBM 1.90
Genuine Parts Company Common St GPC 1.52
Boeing Company (The) Common Sto BA 1.42
Pfizer, Inc. Common Stock PFE 1.24
Johnson & Johnson Common Stock JNJ 1.16
Deere & Company Common Stock DE 1.15
Newmont Mining Corporation (Hol NEM 1.13

Most stocks are in consumer defensive (staples) sector:

Sector Weightings (%)
Sector GABEX Category Avg
Basic materials
5.20 1.59
Consumer cyclical
8.06 6.17
Financial services
10.68 17.92
0.37 0.25
Consumer defensive
24.68 15.01
12.33 12.90
4.95 6.12
Communication services
5.68 5.72
9.64 12.45
12.74 13.09
5.67 8.79

It is interesting to see that the fund has Newmont Mining (NYSE:NEM) as one of its top holdings. Newmont Mining is one of the largest gold miners. Recently, many precious metal miners have had good business, thanks to the gold and silver price strength (though, gold just had a big correction recently).

The following compares the fund's performance with two diversified asset allocation portfolios using dividend ETFs:

Portfolio Performance Comparison

Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
Retirement Income ETFs Strategic Asset Allocation Risk Profile 0 -5% -7% 18% 74% 0% -1%
GABEX 3% 52% 18% 63% 1% 8%
Retirement Income ETFs Tactical Asset Allocation Risk Profile 0 -2% -13% 13% 64% 10% 44%

Portfolio Compare Link

Three-Year Chart - (click to expand)

It is impressive that the fund out performed the diversified ETF strategic allocation portfolio in the last 1 and 5 years. This does illustrate the extra alpha due to Gabelli's stock picking skills.

The nine dividend stocks from Gabelli Equity Income can serve as candidates for dividend and income investors.

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

Additional Disclosure: We do not have any business relationship with the company or companies mentioned in this article. It does not set up retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.