The Reaves Utility Income Fund (NYSE Amex: UTG) announced today the next three monthly dividends, at a rate of $0.125 per common share per month, unchanged from the per share rate paid for the previous quarter. The dividend represents an annualized yield of 5.58% based on the current market price. As of June 20, 2012, the Fund’s market price was $26.86 per share and its net asset value was $25.01 per share.
The Fund declares that $0.125 per share of the $0.125 per share July distribution, and $0.01 per share of the $0.125 per share August distribution, will be paid as long-term capital gain in accordance with Internal Revenue Code section 855(a) for the fiscal year ended October 31, 2011.
The Fund has formally implemented the 19b-1 exemption received from the Securities and Exchange Commission in 2009. A portion of each distribution may be treated as paid from sources other than net income, including but not limited to short-term capital gain, long-term capital gain and return of capital. The final determination of the source of these distributions, including the percentage of qualified dividend income, will be made after the Fund’s year end.
Ronald J. Sorenson, the Fund’s portfolio manager and Chief Investment Officer at Reaves Asset Management, the Fund’s investment adviser, recently commented about the dividend growth potential of the Fund’s underlying portfolio. “Companies representing 64% of the underlying portfolio’s equity market value as of June 20, 2012 raised their dividend at least three times in the last five years; 50% raised their dividend at least four times in the last five years, and fully 35% raised their dividend at least five times in the last five years. The strong track record of dividend growth is especially attractive in today’s high-volatility, low-interest rate environment and supports the higher multiples the market has accorded these companies in recent months.”