Reaves Utility Income Fund

UTG

Market cap $3.46B

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After examining Reaves Utility Income Trust and DNP Select Income Fund, I favor UTG due to its lower leverage and minimal bond exposure. UTG's holdings are almost all equity with a lower leverage (~17%), while DNP holds ~21% bond allocation and uses higher leverage (~24%). Current credit spreads are unusually thin, making DNP's sizable corporate bond exposure less attractive versus UTG's equity-centric approach.

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Reaves Utility Income Trust remains a buy for its attractive 6.5% yield, robust dividend coverage, and healthy NAV growth. UTG trades at a slight 0.14% discount to NAV, offering a compelling entry point relative to its historical premium. The fund's earnings can support over three years of payouts, with 79.79% of distributions delivered tax-efficiently.