Duff & Phelps Utility and Infrastructure Fund Inc. [DPG] Stock Forecast

This month, I added to 5 different closed-end funds, but it came from the result of selling off 2 for swaps as well. Swap opportunities come up as we can exploit the discount/premium mechanics in closed-end funds. Overall, I have continued to stick with a low or no-leverage theme in this environment as I look to de-risk my CEF portfolio.

It's been a rough year for utility stocks and utility focused CEFs as interest rates have moved up making their high dividend yields less attractive. So despite a bull market in just about everything this year, the SPDR Utility ETF (XLU) is actually down -3.5% YTD and -6.6% over the last year. Now utilities can mean a lot more than just generating, storing or transmitting electricity, particularly if you throw in infrastructure stocks like pipelines, natural gas, water, alternative energy, etc.

Duff & Phelps Utility and Infrastructure Fund investors experienced a significant distribution cut, causing shares of DPG to fall substantially. The cut was due to increased leverage expenses and overall market conditions, making the previous distribution level unsustainable. Despite the cut, the fund's distribution rate remains attractive at 8.3%, and the fund is now trading at a discount, making it more interesting for investors.

We review CEF market valuation and performance through the third week of June and highlight recent market action. CEFs were mostly up on the week due to improving risk sentiment. We discuss a common CEF triple whammy that investors ought to be aware of.

If you go strictly on valuations, what's happening right now is one of the most ridiculous examples of CEF irregularities that I have ever seen. The highly-regarded Duff & Phelps Utility & Infrastructure fund cut its quarterly distribution last Thursday by -40%, from $0.35/share to $0.21/share. And since then, DPG has lost roughly -25% in MKT price, dropping from a +13.5% premium at $12.72 last Thursday to a current -15% discount at around $9.45.

Three out of 22 CEF sectors positive on price and 5 out of 22 sectors positive on NAV last week. Delaware/Abrdn mergers are closed.

Investors are undoubtedly looking for some safety considering that we have seen three bank failures in less than a week. Duff & Phelps Utility and Infrastructure Fund invest in a portfolio of utilities and infrastructure companies that should be able to provide this safety considering their inherent stability.

DPG has continued to push into a higher premium after breaking into premium territory in 2021 for the first time since its inception. The fund's distribution has been steady, and although the NAV rate is elevated, I wouldn't expect a cut.

Utilities and infrastructure companies tend to make good investments during uncertain times because of their overall stability and reasonably high yields. DPG invests in a portfolio of these assets with the goal of providing its investors with a high level of current income.

Now that DPG is trading down and yields are going above 10% by a decent margin, one might want to consider it for its income and exposures. Oil and gas infrastructure, whether commodity exposed or not, are decent investments right now.

Duff & Phelps Utility and Infrastructure Fund Inc. is a US stock , located in Chicago of Il and trading under the symbol DPG

Duff & Phelps Utility and Infrastructure Fund Inc. stock price is $8.595 today.

Yes, Duff & Phelps Utility and Infrastructure Fund Inc. is a publicly traded company.