Dividend-News

GGN: Stream Of Everlasting Dividends Or Destroyer Of Capital?

Published Mon, 16 Jan 2017 14:39:57 -0500 on Seeking Alpha

The GAMCO Global Gold, Natural Resources & Income Trust (NYSEMKT:GGN) (11.13% yield, -6.59% discount, -1.40 z-score, 10.50% leverage, 1.29% expense ratio) appears to be one of the more divisive closed-end funds (CEFs) out there. Some investors are attracted by GGN's tremendous yield, currently in excess of 11.13%, that is paid into their accounts monthly. Others are concerned about GGN's high, and possibly destructive, return-of-capital distributions (ROC) that has led to a dwindling of its share price over time. Both viewpoints were on display in my recent article "CEFL/YYY Investors Face Imminent 12% Distribution Cut." For example, reader jvtrow said that "as long as they keeping paying the $dividend I am staying long GGN" (2 likes), while the real bob stated that "GGN's dividend comes from destructive return of capital, not income. Most of GGN's stocks don't pay much in dividends them self" (4 likes). Investors seem to either love GGN or hate it, and with 9,475 followers on Seeking Alpha, it is even more popular than the PIMCO High Income Fund (NYSE: PHK) (8,253 followers), another CEF that has also attracted its share of contention and controversy.
In my own investment philosophy, I try to avoid emotion wherever possible. Therefore, I endeavored myself to examine the pertinent facts surrounding this fund, and by sharing my findings and analysis, hope to all investors to make more informed decisions regarding GGN.
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