DGRO: Considering It As A Core For My Portfolio
The iShares Core Dividend Growth ETF is favored by income investors for its focus on U.S. companies with sustainably growing dividends. DGRO has consistently grown and paid dividends for the past ten years, earning an A+ rating from SA Quant. Despite its strong dividend growth, DGRO's yield is lower than competitors SCHD and VYM, though it has performed well in total return terms.
Why Dividend Investors Shouldn't Own DGRO
The iShares Core Dividend Growth ETF (DGRO) has outperformed its peers. It also has enjoyed rapid growth in its AUM. However, I do not think it is the best option for dividend growth investors right now.
DGRO: It Just Doesn't Make Sense To Exclude Growth Stocks
The iShares Core Dividend Growth ETF offers higher dividend growth, a better yield, and slightly lower volatility, making it appealing for defensive investors. The ETF has a low expense ratio of 0.08%, invests in 420 US dividend stocks, and is heavily weighted in Financials, Technology, and Health Care. Compared to the S&P 500, the ETF has more Financials and Health Care, a lower P/E ratio, and a higher dividend yield.
Is there a good reason to invest in the DGRO ETF?
The iShares Core Dividend Growth ETF (DGRO) has retreated in the past few days as American stocks lose momentum and as investors book profits. It has retreated by over 2.85% from its highest level this year and is hovering at its lowest point since November 2021.
DGRO: Forfeiting Yield For Quality
DGRO's low dividend yield and underperformance are offset by its focus on solid, profitable companies with growing dividends and good fundamentals. The ETF's methodology excludes high-risk, high-dividend stocks, ensuring a stable 5-year dividend growth rate of 8.98%. DGRO's diversified portfolio and balanced sector allocation offer safety and smaller drawdowns, making it appealing to long-term investors.
Is iShares Core Dividend Growth ETF (DGRO) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the iShares Core Dividend Growth ETF (DGRO) is a smart beta exchange traded fund launched on 06/10/2014.
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DGRO Continues To Lead The Way As A Dividend Growth Fund
DGRO offers low-cost exposure to U.S. dividend growth stocks, with a diversified portfolio and a 5-star Morningstar rating. The fund's strategy focuses on companies with over five years of dividend growth and a payout ratio under 75%. DGRO has outperformed key competitors like VIG and follows the S&P500's performance, with a 2.2% yield and 9% annual dividend growth.
DGRO: Not An Attractive Dividend Growth Play
iShares Core Dividend Growth ETF's top holdings often have unattractive profiles, leading to market underperformance versus the S&P 500. The ETF focuses on large companies with low dividend yields, missing out on growth opportunities from non-dividend-paying stocks. Despite solid returns, DGRO consistently trails the S&P 500, questioning its value over simply owning the index.
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DGRO: Strong Performance, But Is It Really A Dividend Fund?
I think DGRO's low dividend yield makes it inadequate for income investors, positioning it as a hybrid fund rather than a true dividend play. DGRO outperforms SCHD and VYM in total returns but lags behind the S&P 500, highlighting a fundamental weakness in its strategy: I do not see a reason to hold it. iShares Core Dividend Growth ETF's sector diversification drives its overperformance relative to dividend peers but results in a lower dividend yield.
