An In-depth Analysis of UTG’s Dividend History, Yield, Growth, and Sustainability

Reaves Utility Income Fund (UTG) recently announced a dividend of $0.19 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-18. As investors look forward to this upcoming payment, the spotlight also shines on the company’s dividend history, yield, and growth rates.

Reaves Utility Income Fund is a closed-end management investment company with the objective of providing a high level of after-tax income and total return. It invests in securities of utility companies, including those in the electric, gas, water, and telecommunications sectors.

Reaves Utility Income Fund has maintained a consistent dividend payment record since 2004, with dividends currently being distributed on a monthly basis. The company’s 12-month trailing and forward dividend yield stands at 8.49%, indicating an expectation of consistent dividend payments over the next 12 months.

Over the past three years, Reaves Utility Income Fund’s annual dividend growth rate was 2.90%, which decreased to 1.70% over a five-year horizon. However, over the past decade, the company has shown a more promising annual dividends per share growth rate of 5.10%. Based on the current dividend yield and five-year growth rate, the 5-year yield on cost of Reaves Utility Income Fund stock is approximately 9.24%.

To evaluate the sustainability of the dividend, it is important to consider the company’s payout ratio and profitability. Reaves Utility Income Fund’s dividend payout ratio is 0.00 as of 2023-04-30, suggesting that the company retains a significant portion of its earnings for future growth.

In terms of profitability, Reaves Utility Income Fund ranks 3 out of 10, indicating lower earnings prowess relative to its peers. The company has reported net profit in 7 out of the past 10 years.

Considering the company’s growth rank of 3 out of 10, it appears that Reaves Utility Income Fund has poor growth prospects, which could impact the sustainability of its dividend.

While Reaves Utility Income Fund’s consistent dividend payments and relatively high yield may be attractive to investors, its low profitability and growth ranks raise concerns about the sustainability of its dividend. Investors are advised to consider these factors before making investment decisions.