Most investors settle for utility dividends that pay quarterly, but Contrarian Outlook highlights monthly dividend payers with yields as high as 8.3% and 8.6%. With these high yields, investors can actually retire on dividends by converting a chunk of their savings into regular cash flow. By investing in funds like Cohen & Steers Infrastructure Fund (UTF) or Reaves Utility Income (UTG), investors can receive monthly payouts and potentially benefit from a decrease in leverage costs as the Federal Reserve cuts rates. UTF, which trades at a discount, yields 8.3% and includes top holdings like NextEra Energy (NEE). On the other hand, UTG, which trades at a premium, yields 8.6% and focuses on “old school” utilities like Duke Energy and Southern Co.
UTF and UTG are expected to benefit from the Federal Reserve’s rate cuts and the current top in long rates. With minimal overlap in their holdings, these funds provide excellent 8%+ yields for investors who are looking for monthly payments. While UTG does not trade at a discount like UTF, its consistent premium in recent years suggests potential long-term benefits for investors who are willing to pay for its underlying assets. In the current market environment, lower rates are expected to lift both funds and provide a nice tailwind for their holdings. By investing in both UTF and UTG, investors can take advantage of these high yields and monthly payments as part of their income strategy for retirement.
