Reaves Utility Income Fund Increases its Monthly Distribution 5.26% to $0.20 Per Share

Rhea-AI Summary

Reaves Utility Income Fund (UTG) announced a 5.26% increase in its annual distribution to $2.40 per share, to be paid monthly at $0.20 per share. This marks the fund's thirteenth distribution increase since its 2004 inception. The new distribution represents a 6.92% annualized rate based on the current market price of $34.66. The fund's net asset value stands at $35.13 per share as of June 18, 2025. The fund maintains its investment focus on utility and infrastructure companies, with at least 80% of assets invested in companies involved in electricity, gas, water, telecommunications, and infrastructure operations. Total assets under management are approximately $3.87 billion with 89.52 million common shares outstanding.

Positive

• Distribution increased by 5.26% to $2.40 annually ($0.20 monthly)
• Attractive 6.92% annualized distribution rate based on current market price
• Fund's NAV ($35.13) trading at a premium to market price ($34.66)
• Substantial assets under management of $3.87 billion

Negative

• Distributions may include return of capital, not just net income
• Portfolio concentration risk with 80% of assets in utility sector

Insights

Financial Analyst specializing in Income Investments

UTG's 5.26% distribution increase provides a compelling 6.92% yield with long-term income growth potential for shareholders.

Reaves Utility Income Fund's 5.26% distribution increase to $0.20 per share monthly ($2.40 annually) represents a significant development for income-focused investors. This marks the fund's thirteenth distribution increase since inception in 2004, demonstrating a consistent track record of growing shareholder payouts.

The new annualized yield of 6.92% stands out in today's market environment, particularly within the traditionally defensive utility sector. This yield is calculated based on the current market price of $34.66, which sits at a slight 1.3% discount to the fund's net asset value of $35.13 – potentially offering a modest valuation advantage for new investors.

Looking at the fund's structure, UTG maintains approximately $3.87 billion in assets under management spread across 89.52 million outstanding shares. The portfolio maintains at least 80% exposure to utilities and infrastructure companies, which typically generate stable, regulated cash flows – an important consideration for distribution sustainability.

Investors should note the fund's implementation of the 19b-1 exemption, which permits distributions from sources beyond traditional income, including capital gains and potentially return of capital. This structure provides flexibility but requires attention to the final determination of distribution sources for tax planning.

With utilities providing essential services and regulated returns, this distribution increase signals management's confidence in the portfolio's ability to support higher payouts despite various macroeconomic factors. The substantial 6.92% yield positions UTG as an attractive vehicle for investors seeking meaningful income in a sector known for stability and defensive characteristics.

DENVER, CO / ACCESS Newswire / June 23, 2025 / Reaves Utility Income Fund (NYSE American:UTG) is pleased to announce today a 5.26% increase in its annual distribution to $2.40, to be paid monthly at the rate of $0.20 per common share. This is the thirteenth increase of the distribution since the Fund's inception in February 2004. The increased dividend rate represents an annualized distribution rate of 6.92% based on the current market price. As of June 18, 2025, the Fund's market price was $34.66 per share and its net asset value was $35.13 per share.

Tim Porter, the Fund's co-portfolio manager and Chief Investment Officer of Reaves Asset Management, the Fund's investment adviser, commented, "We are pleased to raise the Fund's distribution rate and remain confident that our portfolio of utility and infrastructure companies will continue to support the Fund's monthly distribution to shareholders."

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.

Not less than eighty percent of the Fund's assets will continue to be invested in the securities of domestic and foreign companies involved to a significant extent in providing products, services, or equipment for (i) the generation or distribution of electricity, gas or water, (ii) telecommunications activities or (iii) infrastructure operations, such as airports, toll roads and municipal services ("Utilities" or the "Utility Industry"). As a policy, the Fund continues to strive to provide a high level of after-tax income and total return consisting primarily of tax-advantaged distributions and capital appreciation.

The following dates apply to the upcoming distributions that have been declared:

Ex-Date: July 18, 2025
Record Date: July 18, 2025
Payable Date: July 31, 2025

Ex-Date: August 18, 2025
Record Date: August 18, 2025
Payable Date: August 29, 2025

Ex-Date: September 17, 2025
Record Date: September 17, 2025
Payable Date: September 30, 2025

Reaves Utility Income Fund
The investment objective of the Fund is to provide a high level of income and total return consisting primarily of tax-advantaged distributions and capital appreciation. There were approximately $3.87 billion of total assets under management and 89.52 million common shares outstanding as of June 18, 2025.

An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain an annual report or semi-annual report which contains this and other information visit www.utilityincomefund.com or call 1-800-644-5571. Read them carefully before investing.

There is no guarantee that distributions will be paid or that the rate will remain the same.
Paralel Distributors LLC, FINRA Member Firm.

SOURCE: Reaves Utility Income Fund

View the original press release on ACCESS Newswire

FAQ

What is the new distribution amount for UTG stock?

UTG's new distribution is $0.20 per share monthly, or $2.40 annually, representing a 5.26% increase.

What is UTG's current dividend yield?

UTG offers a 6.92% annualized distribution rate based on the current market price of $34.66.

How many times has UTG increased its distribution since inception?

This is UTG's thirteenth distribution increase since the Fund's inception in February 2004.

What is UTG's investment focus?

UTG invests at least 80% of assets in companies involved in utilities (electricity, gas, water), telecommunications, and infrastructure operations.

What are UTG's total assets under management?

UTG has approximately $3.87 billion in total assets under management as of June 18, 2025.