Gabelli Dividend & Income Trust Continues Monthly Distributions, Declares Distributions of $0.11 Per Share

Rhea-AI Summary

The Gabelli Dividend & Income Trust (GDV) continues its fixed monthly cash distributions, declaring $0.11 per share for April, May, and June 2024. The Fund's Board of Trustees reviews potential distributions quarterly, adjusting in December if necessary. Shareholders may receive long-term capital gains, qualified dividend income, or return of capital. Tax implications include federal income tax rates and Medicare surcharge. Distributions in 2024 are estimated to consist of 5% net investment income, 18% net capital gains, and 77% return of capital.

Insights

Financial Analyst

The announcement by The Gabelli Dividend & Income Trust regarding the continuation of its fixed monthly cash distributions is a significant piece of information for both current and prospective investors. The decision to maintain the distribution at $0.11 per share for the upcoming months reflects the Fund's commitment to providing consistent returns to its shareholders. From a financial perspective, this stability can be attractive to income-focused investors, particularly in volatile market conditions.

However, it's crucial to monitor the sustainability of these distributions. The Fund's approach to review potential distributions quarterly based on income, realized capital gains, or available capital suggests a prudent strategy. Still, investors should be aware that the Fund's ability to maintain these distributions could be affected by market fluctuations and the performance of its investments. The mention of a possible adjusting distribution in December to satisfy the minimum distribution requirements of the Internal Revenue Code indicates that the Fund is actively managing its distribution policy to align with regulatory standards.

Tax Advisor

For investors, understanding the tax implications of these distributions is essential. The Fund's distributions may be composed of net investment income, net capital gains, or return of capital. In particular, the return of capital is not taxable and reduces the shareholder's cost basis, which could have significant tax implications when the shares are sold. The current federal income tax rate for long-term capital gains is 20% for taxable accounts, but this may vary depending on an individual's tax bracket.

Additionally, the 3.8% Medicare surcharge on 'net investment income' for certain high-income shareholders is a critical consideration. Shareholders should consult with tax professionals to understand the impact of these distributions on their personal tax situation, especially since the Fund has indicated that the allocation of the distribution components can vary and the final determination will be made after year-end.

Market Research Analyst

When assessing the Fund's announcement, it's important to consider the broader economic and market environment. The decision to maintain a fixed distribution could signal confidence in the Fund's investment strategy and portfolio performance. However, it's also crucial to analyze the Fund's payout ratio, which is the percentage of earnings paid out as dividends to shareholders. A payout ratio that is too high could be unsustainable in the long run.

The Fund's statement that a significant portion of the distribution may be deemed a return of capital indicates that the current earnings might not be sufficient to cover the distributions completely. This could be a point of concern as it may suggest that the Fund is returning the investor's own capital instead of generating enough income from its investments. Investors should keep an eye on the Fund's earnings reports and the sources of its distributions to evaluate the long-term viability of its payout policy.

RYE, N.Y., Feb. 14, 2024 (GLOBE NEWSWIRE) -- The Board of Trustees of The Gabelli Dividend & Income Trust (NYSE:GDV) (the “Fund”) approved the continuation of its policy of paying fixed monthly cash distributions. The Board of Trustees declared cash distributions of $0.11 per share for each of April, May, and June 2024.

Distribution Month	Record Date	Payable Date	Distribution Per Share
April	April 16, 2024	April 23, 2024	$0.11
May	May 16, 2024	May 23, 2024	$0.11
June	June 13, 2024	June 21, 2024	$0.11

Each quarter, the Board of Trustees reviews the amount of any potential distribution from the income, realized capital gain, or capital available. The Board of Trustees will continue to monitor the Fund’s distribution level, taking into consideration the Fund’s net asset value and the financial market environment. If necessary, the Fund will pay an adjusting distribution in December which includes any additional income and net realized capital gains in excess of the monthly distributions for that year to satisfy the minimum distribution requirements of the Internal Revenue Code for regulated investment companies. The Fund’s distribution policy is subject to modification by the Board of Trustees at any time, and there can be no guarantee that the policy will continue. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund.

All or part of the distribution may be treated as long-term capital gain or qualified dividend income (or a combination of both) for individuals, each subject to the maximum federal income tax rate for long term capital gains, which is currently 20% in taxable accounts for individuals (or less depending on an individual’s tax bracket). In addition, certain U.S. shareholders who are individuals, estates or trusts and whose income exceeds certain thresholds will be required to pay a 3.8% Medicare surcharge on their "net investment income", which includes dividends received from the Fund and capital gains from the sale or other disposition of shares of the Fund.

If the Fund does not generate sufficient earnings (dividends and interest income, less expenses, and realized net capital gain) equal to or in excess of the aggregate distributions paid by the Fund in a given year, then the amount distributed in excess of the Fund’s earnings would be deemed a return of capital. Since this would be considered a return of a portion of a shareholder’s original investment, it is generally not taxable and would be treated as a reduction in the shareholder’s cost basis.

Long-term capital gains, qualified dividend income, investment company taxable income, and return of capital, if any, will be allocated on a pro-rata basis to all distributions to common shareholders for the year. Based on the accounting records of the Fund currently available, each of the distributions paid to common shareholders in 2024 would include approximately 5% from net investment income, 18% from net capital gains and 77% would be deemed a return of capital on a book basis. This does not represent information for tax reporting purposes. The estimated components of each distribution are updated and provided to shareholders of record in a notice accompanying the distribution and are available on our website (www.gabelli.com). The final determination of the sources of all distributions in 2024 will be made after year end and can vary from the monthly estimates. Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of the current distribution. All individual shareholders with taxable accounts will receive written notification regarding the components and tax treatment for all 2024 distributions in early 2025 via Form 1099-DIV.

Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. For more information regarding the Fund’s distribution policy and other information about the Fund, call:

Carter Austin
(914) 921-5475

About The Gabelli Dividend & Income Trust
The Gabelli Dividend & Income Trust is a diversified, closed-end management investment company with $2.7 billion in total net assets whose primary investment objective is to provide a high level of total return with an emphasis on dividends and income. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (OTCQX: GAMI).

NYSE – GDV
CUSIP – 36242H104

Investor Relations Contact:
Carter Austin
(914) 921-5475
caustin@gabelli.com

FAQ

What is the distribution per share declared by The Gabelli Dividend & Income Trust (GDV) for April, May, and June 2024?

The Board of Trustees approved cash distributions of $0.11 per share for each of April, May, and June 2024.

How does The Gabelli Dividend & Income Trust (GDV) review potential distributions?

The Board of Trustees reviews the amount of any potential distribution from income, realized capital gain, or capital available quarterly.

What are the tax implications for shareholders receiving distributions from The Gabelli Dividend & Income Trust (GDV)?

Shareholders may receive long-term capital gains, qualified dividend income, or return of capital. Tax implications include federal income tax rates and a Medicare surcharge on net investment income.

What are the estimated components of the distributions paid to common shareholders in 2024 by The Gabelli Dividend & Income Trust (GDV)?

Based on accounting records, distributions in 2024 are estimated to consist of approximately 5% net investment income, 18% net capital gains, and 77% return of capital.