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PDT: Utilities CEF, A Viable Alternative To DNP

Binary Tree Analytics profile picture
Binary Tree Analytics


  • PDT is a CEF that invests in a diversified portfolio of dividend paying common stocks and preferred securities.
  • The fund is defensively set up, with over 51% of its current composition coming from the utilities sector.
  • On a trailing total return basis, we see 5- and 10-year returns here that stand at 9.1% and 10.8% respectively for this fund.
  • The vehicle comes from the same suite of products as the much better known DNP Select Income Fund and has achieved similar long-term results.

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The John Hancock Premium Dividend Fund (NYSE:PDT) is a closed end fund which has high current income as its main goal, and modest growth of capital as a secondary one. The fund invests in a diversified

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Binary Tree Analytics profile picture
With a financial services cash and derivatives trading background, Binary Tree Analytics aims to provide transparency and analytics in respect to capital markets instruments and trades.We are reachable at BinaryTreeAnalytics@gmail.com_____________________________http://www.BinaryTreeAnalytics.com

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (18)

Eileen Dover profile picture
PDT a hold at 16.32, now 14.75. Asking around if it is recommended to enter at this price while still at a premium ? Thank you
I have owned DNP, PDT, HTD and CHSCP for quite awhile and have no complaints.
Steven Bavaria profile picture
PDT's sibling HTD a better choice.
The only utility CEF worth owning is BUI due to it's zero leverage. Levered funds suck.
@outlook69 Completely untrue! BUI, HTD, UTG, DNP are all utility focused and they all have excellent long term performance and the last three are leveraged. I own them all.

Leverage can work both ways. The expertise of management is what matters. In the real estate sector RQI is leveraged and outperforms the no leverage RFI with the same management team and I dare you to find a non leveraged taxable bond fund that outperforms the heavily leveraged PIMCO taxable CEF’s. I’ll wait.
Eileen Dover profile picture
@SeattleKraken How would you rate utility fund FT with the rest? It has a pretty good history and raised the payout last year 33%.
@Eileen Dover I’ve never really looked at it. A quick glance at their investments shows it’s a lot more debt focused whereas all the ones I listed are equity focused. Can’t really give you an informed opinion on FT.
Eileen Dover profile picture
Sold PDT last year when premium was high. Was waiting for a big enough drop before going back in, but missed the quick drop in the 14's in Feb and March, so I will continue to watch. Discount of 8% high but any premium wouldn't stop me from getting DNP if it ever dropped back to its past regular low 10's (or lower).
Always reluctant to buy a utility fund at a premium.
Eileen Dover profile picture
@MadiR Except for DNP with its 37 year no cut monthly payout history.
Weather Man profile picture
Have it, like it.
I’ll take HTD over PDT.
Own both PDT & DNP. Both are integral parts of my portfolio providing income helping provide a comfortable retirement.
One of my favorite income generators
chuckmyd profile picture
Great article and have $PDT on my radar. Always looking for stable consistent long term payers.
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