Gabelli Equity Trust (GAB) Stock

RYE, N.Y., Nov. 14, 2024 (GLOBE NEWSWIRE) -- The Board of Directors of The Gabelli Equity Trust Inc. (NYSE:GAB) (the “Fund”) reaffirmed and satisfied its 10% distribution policy by declaring a $0.15 per share cash distribution payable on December 20, 2024 to common stock shareholders of record on December 13, 2024. With this fourth quarter distribution, the total distributions from the Fund for 2024 would equate to $0.60 per share.

The Gabelli Equity Trust offers a high 10.68% yield but has underperformed the S&P 500 and its peers over the past five years. The GAB closed-end fund's high yield raises concerns about potential distribution cuts, especially given its reliance on unrealized capital gains. Despite its attractive yield, the fund's higher expenses and leverage, coupled with poor performance, make it less appealing than its peers.

RYE, N.Y., Aug. 23, 2024 (GLOBE NEWSWIRE) -- The Board of Directors of The Gabelli Equity Trust Inc. (NYSE:GAB) (the “Fund”) reaffirmed and satisfied its 10% distribution policy by declaring a $0.15 per share cash distribution payable on September 23, 2024 to common stock shareholders of record on September 16, 2024.

Gabelli Equity Trust was undervalued ten months ago and has outperformed since. Current market conditions with stretched valuations make it a hold rather than a buy. GAB has shifted towards mid-cap stocks with a lower P/E ratio compared to the S&P 500. While the fund has benefited from recent rallies in the financial sector, this is seen as a temporary trend. The fund's value tilt is also a positive.

GAB is currently trading at a slight discount, making it a more appealing option compared to our previous assessment. Investors who are willing to wait may seek a larger discount before considering this fund. The main appeal of GAB for income investors is its minimum 10% managed distribution policy.

Gabelli Equity Trust is an equity closed-end fund focused on long-term capital growth with income as a secondary objective. The fund seeks undervalued companies with above-average growth potential. GAB has historically closely tracked the returns of the S&P 500, with an impressive track record. The fund is currently trading at a low premium to its net asset value after breaching its usual range in 2022.

The swap between Gabelli Equity and Liberty All-Star Equity funds has proven successful for investors, with USA significantly outperforming on a total return basis. Both funds are now trading at similar valuations, with the performance difference likely to come from the underlying portfolio rather than convergence in valuations. Despite the success of the swap, neither fund is considered a strong buy candidate at this time due to both still trading above their longer-term historical discount levels.