In Case You Need A Reminder, Swap GUT For DPG

Summary

  • Fourteen months ago, I wrote on article that described the absurd valuation difference between two utility funds that actually had much in common.
  • But based on the NAV and MKT yields of the funds, I felt that one fund was dramatically more attractive, even though it had just cut its distribution.
  • Because when shareholders only care about how high a fund's market yield is while completely ignoring the fund's ability to cover it, bad things eventually happen.
  • On the other hand, shareholders will likely abandon a fund that cuts its distribution, even though a distribution cut might be the catalyst for NAV growth.
  • And here's where short-term interests and downright greed are sacrificed for long-term benefits.  And I can't think of a better example of that than this.

market stock graph and information with city light and electricity and energy facility industry and business background

MadamLead

A year and two months ago, I wrote this article Equity CEFs: So DPG Cuts But GUT Won't Have To?

Essentially, the crux of the story was that for two funds that had very similar utility and infrastructure portfolios, the

Thank you for reading my article. My goal is to give you observations and actionable ideas in Closed-End funds while educating you on how these unique and opportunistic funds work.

CEFs can be one of the most exhilarating and yet most frustrating security classes to invest in, and it's important that you have someone who can be a level head during up and down periods of the market. I hope to be that voice of calm when necessary. ~ Douglas Albo

If you'd like to learn more about my services, please go to this link:

CEFs: Income +Opportunity

This article was written by

12.72K Followers

Douglas Albo has been a financial professional for 20+ years and a registered investment advisor over a decade. His background includes several years at Smith Barney and Morgan Stanley. He has been covering equity CEFs on Seeking Alpha for well over a decade as well.

Douglas is the leader of the investing group CEFs: Income + Opportunity where he provides coverage of the best ideas in equity CEFs. Features of the group include: analysis of tax-advantaged distribution funds, real time trading alerts and ideas, weekly performance spreadsheets, a portfolio guide updated every 2 weeks, and chat for dialogue and questions. Learn more.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of DPG either through stock ownership, options, or other derivatives. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About DPG Ticker

SymbolLast Price% Chg
Expense Ratio
Div Frequency
Div Rate
Yield
Assets (AUM)
Volume
Compare to Peers

More on DPG

Related Stocks

SymbolLast Price% Chg
GUT
--
DPG
--