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UTF: A Powerful Income CEF Yields 7.8%, Pays Monthly

Published Sat, 13 Jun 2020 09:45:00 -0400 on Seeking Alpha

Cohen & Steers Infrastructure Fund continues to be a high-yield defensive pick at an attractive price.
UTF is a CEF with a yield of 7.8%.
The CEF invests in the infrastructure and utility sectors which are very defensive in nature.
Net Asset Value is improving from its low in March.
Co-produced with PendragonY
Investing in high-yield defensive picks is a very effective income strategy, particularly in times of great uncertainty. Infrastructure, particularly utilities, is a defensive sector thanks to the necessity of their product and significant regulation that creates a large moat.
Utility companies also tend to have high, and rather stable, cash flow. As a result, individual utility companies often have fairly low yields since they are very popular with dividend investors. At High Dividend Opportunities, we generally seek to have dividend yields in excess of 6%. That puts many quality utility companies out of our target range.
Fortunately, there's a way we can get exposure to high-quality utility companies and get high yields as well. Yes, it's possible to have our cake and eat it too!
One of our preferred methods to get high yield out of sectors that generally do not pay high yields is a closed-end fund. CEFs frequently use leverage to boost returns, will pay distributions that are paid for through both dividends received and capital gains, and often focus on a particular sector. By investing in a CEF, we can get instant diversification in a sector, and the CEF converts capital gains into a nice stable distribution.
In the utility sector, one of our favorite CEFs is the Cohen & Steers Infrastructure Fund (UTF). UTF provides us with exposure to high-quality infrastructure, while paying us an 7.8% yield. UTF has been a steady conservative position in our high-yield portfolio, and every income investor should own it too.
UTF Historical Performance
CEFs are actively traded, meaning that the manager is buying and selling... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
REAVES UTILITY INCOME FUND 36.75   0.0 0.00 0.00 5.89
KINDER MORGAN 20.42   20.6 0.99 1.00 4.94
NEXTERA ENERGY 220.74   31.7 6.96 5.00 2.29
AMERICAN TOWER 218.85   66.3 3.30 3.68 1.70
AMERICAN WATER WORKS 121.76   37.8 3.22 2.00 1.66


Older articles featuring Reaves Utility Income Fund (UTG):
My Income Portfolio - The Dividend Dilemma
Bear Market Thoughts: Is Closed-End Fund Investing 'Chasing Yield?'
Income Lab Ideas: Dividend Reinvestment Plan
Dividend Reliability During A Recession
Mutating The Hybrid Dividend Income Portfolio: Stocks Out, CEFs In
Barron's List Of Best Yield Plays For 2019 Turns To Verizon For Safety
High Yield For Granny (Part 2): Savvy 'Widows & Orphans' Portfolio Re-Visited
These 3 Sectors Have The Longest Dividend Streaks, But Which Offers The Best Dividend Growth?
Dividend Cuts - Managing Their Impact On Our 'Income Factory'
Cohen & Steers Infrastructure Fund: A Quality CEF To Play A Return To The Yield Trade