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Gabelli Utility Trust Continues Monthly Distributions, Declares Distributions of $0.05 Per Share
Rhea-AI Impact
(Low)
Rhea-AI Sentiment
(Very Positive)
Tags
Rhea-AI Summary
The Gabelli Utility Trust (NYSE:GUT) has reaffirmed its commitment to fixed monthly cash distributions, declaring $0.05 per share for April, May, and June 2022. The record and payable dates for these distributions are set for April 14 and 22, May 16 and 23, and June 15 and 23, respectively. The Trust, with $337 million in net assets, continues to explore strategic investment opportunities while monitoring market conditions. The Board emphasizes that the premium of the Fund's shares over net asset value may not last. The Trust has maintained monthly payouts since October 1999.
Positive
Continued monthly distribution of $0.05 per share signifies consistent cash flow for investors.
Ongoing evaluations for strategic opportunities suggest proactive management for potential growth.
The Trust has a long history of monthly distributions since October 1999, indicating stability.
Negative
Shares trading at a premium to net asset value may indicate potential pricing risks for investors.
RYE, N.Y.--(BUSINESS WIRE)--
The Board of Trustees of The Gabelli Utility Trust (NYSE:GUT) (the “Fund”) approved the continuation of its policy of paying fixed monthly cash distributions. The Board of Trustees declared cash distributions of $0.05 per share for each of April, May, and June 2022.
Distribution Month
Record Date
Payable Date
Distribution Per Share
April
April 14, 2022
April 22, 2022
$0.05
May
May 16, 2022
May 23, 2022
$0.05
June
June 15, 2022
June 23, 2022
$0.05
Additionally, the Board of Trustees continues to evaluate potential strategic opportunities for the Fund in what we believe to be an attractive environment to invest in the broader equity markets.
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. The Gabelli Utility Trust has paid a distribution to shareholders every month since October 1999.
The Fund’s shares are currently trading at a premium to net asset value. The Board of Trustees believes that the premium at which the Fund shares trade relative to net asset value is not likely to be sustainable. Shareholders participating in the Fund’s dividend reinvestment plan should note that at the current market price, the reinvestment of distributions occurs at a premium to net asset value.
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 2022 would be deemed 100% from paid-in 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 2022 will be made after year end and can vary from the quarterly 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 2022 distributions in early 2023 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, visit www.gabelli.com or call:
David Schachter (914) 921-5057
About The Gabelli Utility Trust
The Gabelli Utility Trust is a diversified, closed-end management investment company with $337 million in total net assets whose primary investment objective is to seek long-term growth of capital and income by investing primarily in utility companies involved in the generation and distribution of electricity, gas, and water. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (NYSE:GBL).
