Cohen & Steers Infrastructure Fund Pays Nearly 7% Dividend Yield (UTF)

The Cohen & Steers Infrastructure Fund, Inc. Is currently rewarding its shareholders with a yield approaching 7% and has raised its annual dividend payout for the past four consecutive years.

Over those four years, the fund grew its annual dividend amount on average by double-digit percentages every year. To complement its rising dividend income, the fund also managed a double-digit percentage enhancement of its share price over the past 12 months.

The fund will distribute its next monthly dividend on the December 29, 2017, pay date to all its shareholders of record prior to the December 19, 2017, ex-dividend date.

Cohen & Steers Infrastructure Fund, Inc. (NYSE:UTF)

Established on March 30, 2004, the Cohen & Steers Infrastructure Fund is a non-diversified, closed-end management investment company. The fund’s primary investment objective is high current income through investment in securities issued by infrastructure companies. Infrastructure companies typically provide the physical framework that society requires to function on a daily basis and are defined as utilities, pipelines, toll roads, airports, railroads, marine ports and telecommunications companies. As of September 30, 2017, the fund had $3 billion in total assets under management spread across 179 individual holdings. Its top four holdings and their weightings are Crown Castle International Corp. (NYSE:CCI), 4.6%; NextEra Energy Inc. (NYSE:NEE), 4.3%; American Tower Corporation (NYSE:AMT), 3.8%; and Sempra Energy (NYSE:SRE), 2.7.They collectively account for 15.4% of the fund’s total assets.

UTF’s top 10 holdings account for 28.8% of its total assets. The fund has three sectors with double-digit-percentage weightings and those sectors combined account for 40% of total assets – Regulated Electric, 19%; Midstream- C Corp., 11%; and Tower, 10%. Geographically, the fund has 54% of its assets invested in the United States and 6% in Canada. The remaining sectors and geographical asset distribution are provided in the accompanying chart below.

Chart Source: Cohen & Steers Infrastructure Fund, Inc. Factsheet, www.cohenandsteers.com

The share price started its most recent trailing 12 months with a 2.3% drop from $19.80 on December 6, 2016, to its 52-week low of $19.34, which it reached on December 28, 2016. However, after that low, the share price ascended more than 23% with minimal volatility and hit its 52-week high of $23.80 on June 19, 2017. Since the June peak, the share price has been trading mostly sideways in the $22.50 to 23.75 range. The share price closed on December 6, 2017, at $23.28, which is just 2.2% below the June peak, 17.6% higher than it was one year ago and 20.4% above the 52-week low from the end of December 2016.

The fund’s monthly dividend payout of $0.134 is equivalent to a $1.608 annualized distribution and a 6.9% yield. While this current yield is slightly below the average of the Closed-End Equity Fund segment, the fund’s yield is 77% higher than the 3.9% average yield of the entire Financial sector. Between May 2004 and the end of 2008, the monthly dividend payout rose 144% from $0.085 to $0.2075. However, the fund switched to $0.24 quarterly dividends for 2009, which effectively cut its total annual payout by more than 60%.

After a 50% hike to its quarterly payout to $0.36 in the third quarter of 2010, the fund paid the same amount for the following 14 consecutive quarters through the end of 2013. The fund started to raise its annual dividend again in 2014 and switched back to paying monthly dividends in the fourth quarter of 2016. Since resuming annual dividend hikes in 2014, the total annual dividend amount rose at an average growth rate of 13.8% per year. The resulting total annual payout increase is 68% since 2014.

Over the last 12 months the shareholders enjoyed a 27% total return. The stock went through a down period in 2015 and 2016, so the three-year total return is just 22%. However, the total return over the past five years is 76%.

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