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GDV: Attractive Discount, 6.23% Distribution Yield

Published Mon, 14 Dec 2020 08:04:51 -0500 on Seeking Alpha

Seeking AlphaClosed End FundsGDV: Attractive Discount, 6.23% Distribution YieldDec. 14, 2020 8:04 AM ET|| About: Gabelli Dividend & Income Trust (The) (GDV), Includes: DVCMY, DVDCF, GDV.PG, GDV.PH, MO, SWMAF, SWMAY, XLFby: Nick AckermanNick Ackerman CEF/ETF Income LaboratoryCEF/ETF income and arbitrage strategies, 8%+ portfolio yieldsSummaryGDV is trading at a wide discount that is making it an attractive buy candidate.
The fund pays a monthly distribution at a sustainable level, the large discount makes it all the more enticing for investors.
The underperformance comes from being overweight financials, which seems like a sector at a great value at this time too.
Written by Nick Ackerman, co-produced by Stanford Chemist
Gabelli Dividend & Income Trust (GDV) is a fund that has been underperforming due to its financial exposure. If one believes that the rotation into value can continue, that means GDV might be an appropriate choice for equity income investors. Even if you think that value won't outperform growth, the fund can still be a great place to put some cash to work to remain diversified. The fund has paid a reliable monthly distribution almost since its inception. After 2008/09 it did cut its distribution but maintained a monthly frequency.
GDV has done well since we last covered the fund earlier this year. This was combined with the overall market rebounding and the fund really outperforming over the last few weeks too. Due to that rotation to value trade we have been seeing a bit of.

(Source - Seeking Alpha)
While GDV is overweight financials, they are so much more than that too. They have an objective to "provide a high level of total return." They intend on doing this by "investing at least 80% of its assets in dividend-paying or other income-producing securities." They also added that "under normal market conditions, at least 50% of the Fund's assets will consist of dividend-paying equity securities."
Meaning that they... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ALTRIA GROUP 44.46   13.2 3.36 3.36 7.23
SWEDISH MATCH AB 21.73   0.0 0.00 0.00 0.00


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