WEC - DNP: The 7.50% Yield Is Nice But The Fund Looks Overpriced

• Utilities tend to be solid investments for retirees because of their stable cash flows and high yields.
• DNP offers a substantially better yield than indexed utility funds at 7.50%.
• There is some excitement around electric utilities right now, but this appears to be unjustified as demand will not grow like some predict.
• The fund appears easily able to cover its distributions, which should be comforting to potential investors.
• The fund's premium is not as high as usual, but it still puts a great deal of faith in management and does not represent a bargain.

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