In this article, we discuss the 5 dividend ETFs to buy now. If you want to read our detailed analysis of these ETFs, go directly to the 10 Dividend ETFs to Buy Now.
5. SPDR S&P Dividend ETF (NYSE:SDY)
Net Assets: $19 billion
SPDR S&P Dividend ETF (NYSE:SDY) is an exchange traded fund that tracks the investment returns of the S&P High Yield Dividend Aristocrats Index which comprises a group of companies listed on the exchanges in the US that have high dividend yields.
A premier holding of the SPDR S&P Dividend ETF (NYSE:SDY) is AT&T Inc. (NYSE:T), a company that provides telecommunications, media, and technology solutions across most of North and Latin America.
At the end of the second quarter of 2021, 68 hedge funds in the database of Insider Monkey held stakes worth $2.8 billion in AT&T Inc. (NYSE:T), up from 63 in the previous quarter worth $2.7 billion.
In its Q1 2021 investor letter, Nelson Capital Management, an asset management firm, highlighted a few stocks and AT&T Inc. (NYSE:T) was one of them. Here is what the fund said:
“Nelson Capital stayed busy in the first quarter, making several adjustments within our core portfolio. In the communication services sector, we sold AT&T (tkr: T). Over the years, AT&T has made several poor acquisitions, especially in the content realm, leaving the company saddled with debt and unable to change directions.”
4. iShares Core Dividend Growth ETF (NYSE:DGRO)
Net Assets: $20 billion
iShares Core Dividend Growth ETF (NYSE:DGRO) is an exchange traded fund that tracks the investment returns of the Morningstar US Dividend Growth Index which comprises a large group of companies that trade on exchanges in the United States.
iShares Core Dividend Growth ETF (NYSE:DGRO) has invested heavily in Pfizer Inc. (NYSE:PFE), a New York-based firm that makes and sells pharmaceutical products across the world.
At the end of the second quarter of 2021, 67 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in Pfizer Inc. (NYSE:PFE), up from 65 in the preceding quarter worth $2 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Pfizer Inc. (NYSE:PFE) was one of them. Here is what the fund said:
“Our underweights in health care and staples contributed to relative performance during the period. As we continue to focus the portfolio on high-conviction ideas, we sold Pfizer in late 2020, in the health care sector.”
3. Schwab U.S. Dividend Equity ETF (NYSE:SCHD)
Net Assets: $26 billion
Schwab U.S. Dividend Equity ETF (NYSE:SCHD) is an exchange traded fund that tracks the investment returns of the Dow Jones U.S. Dividend 100 Index which comprises a group of companies that have a consistent dividend history and strong fundamentals.
One of the biggest holdings of the Schwab U.S. Dividend Equity ETF (NYSE:SCHD) is The Home Depot, Inc. (NYSE:HD), an organization that operates as a home improvement retailer and is based in Georgia.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm AQR Capital Management is a leading shareholder in The Home Depot, Inc. (NYSE:HD) with 1.1 million shares worth more than $360 million.
In its Q1 2021 investor letter, Ensemble Capital, an asset management firm, highlighted a few stocks and The Home Depot, Inc. (NYSE:HD) was one of them. Here is what the fund said:
“Notable contributors to the Fund’s returns this quarter (included) Home Depot. Home Depot (8.9% weight in the Fund) continued to benefit from a red-hot housing and home improvement market, delivering record financial performance in 2020. As a high return on invested capital business, any step-up in growth results in considerable shareholder value creation. While 2021 comparable sales may not yield impressive headline results, we believe there are several secular tailwinds supporting continued housing investment, including millennials entering prime household formation/peak earnings years, relatively low interest rates, and government policies.
Home Depot (8.9% weight in the Fund): The big orange sign of Home Depot is a familiar sight for homeowners across the country. Despite the rise of Amazon, Home Depot has generated outstanding results for shareholders during the rise of eCommerce, even as Home Depot’s end market in housing suffered the worst collapse in a century. Over the last fifteen years, a period which began at the peak of the housing bubble, Home Depot’s stock has generated annual returns of 17% a year, outperforming the S&P 500 by approximately 7% a year.
But while homeowners can attest to their continued shopping at Home Depot, they may not be aware that only about half the company is dedicated to serving Do It Yourself homeowners, with the other half acting as a key supplier to small contractors – which the company calls Pros – who depend on Home Depot as a mission critical business partner.
While the company does not report on their contractor business separately from their homeowner business, they have regularly offered comments indicating that contractors make up just 4% of their customer base, but about 45% of revenue. Basic math implies…”[read the entire letter here]
2. Vanguard High Dividend Yield Index Fund ETF Shares (NYSE:VYM)
Net Assets: $48 billion
Vanguard High Dividend Yield Index Fund ETF Shares (NYSE:VYM) is an exchange traded fund that tracks the investment returns of the FTSE High Dividend Yield Index. The index consists of companies that pay higher-than-average dividends.
A flagship holding of the Vanguard High Dividend Yield Index Fund ETF Shares (NYSE:VYM) is The Procter & Gamble Company (NYSE:PG), a business that makes and sells branded consumer packaged goods.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Cedar Rock Capital is a leading shareholder in The Procter & Gamble Company (NYSE:PG) with 7.5 million shares worth more than $1 billion.
1. Vanguard Dividend Appreciation Index Fund ETF Shares (NYSE:VIG)
Net Assets: $76 billion
Vanguard Dividend Appreciation Index Fund ETF Shares (NYSE:VIG) is an exchange traded fund that tracks the investment returns of the S&P High Yield Dividend Aristocrats Index which comprises a group of high-yield dividend stocks on the S&P Composite 1500 Index.
One of the premier holdings of Vanguard Dividend Appreciation Index Fund ETF Shares (NYSE:VIG) is Johnson & Johnson (NYSE:JNJ), a corporation that makes and sells a range of health-related products globally.
At the end of the second quarter of 2021, 88 hedge funds in the database of Insider Monkey held stakes worth $7 billion in Johnson & Johnson (NYSE:JNJ), up from 81 in the previous quarter worth $6.9 billion.
You can also take a peek at 10 Reddit Stocks Hedge Funds Like and 10 Stocks That Delivered Upbeat Financial Results.
