Investors love to have their cake and eat it too. That's especially true when it comes to equity income investing.
Some dividend ETFs emphasize yield while others focus on companies with long track records of boosting payouts. Look close enough, and investors can find both favorable traits under one umbrella.
The ALPS Sector Dividend Dogs ETF (SDOG) is capturing a market rotation away from technology stocks and toward companies in sectors viewed as less vulnerable to artificial intelligence disruption. Utilities and basic materials holdings lead gains while software names tumble.
ALPS selects the top five-yielding dividend stocks from each GICS sector (excluding Real Estate). Along with its equal-weighting scheme, SDOG is well-diversified, and currently offers a 4.03% 30-Day SEC Yield. However, SDOG does not apply quality screens, which can lead to trouble for its shareholders. My long-term performance analysis reveals that SDOG's return profile is heavily skewed to the downside. SDOG's weak quality features are also evident when analyzing portfolio-level metrics like EBIT margins and return on total capital. Even against other high-yielding funds, SDOG is unattractive.
The ALPS Sector Dividend Dogs ETF (SDOG) applies a classic income strategy across the market by selecting the highest-yielding stocks in each sector, offering investors a way to capture dividends without concentrating in traditional income-heavy areas like utilities or real estate. According to ETF Database, SDOG holds $1.25 billion in assets and has returned 10.
ALPS Sector Dividend Dogs ETF continues to underperform the S&P 500 and leading dividend ETFs, despite good value metrics and sector balance. SDOG suffers from higher volatility, deeper drawdowns, and a relatively high expense ratio compared to peers. In particular, Schwab U.S. Dividend Equity ETF™ offers a similar yield with lower fees, lower risk and better historical performance.
On this episode of the “ETF of the Week” podcast, VettaFi's Head of Research Todd Rosenbluth discussed the ALPS Sector Dividend Dogs ETF (SDOG) with Chuck Jaffe of Money Life. The pair discussed several topics related to the fund to give investors a deeper understanding of the ETF overall.
VettaFi's Head of Research Todd Rosenbluth discussed the ALPS Sector Dividend Dogs ETF (SDOG) on this week's “ETF of the Week” podcast with Chuck Jaffe of “Money Life.” VettaFi.com is owned by VettaFi LLC (“VettaFi”).
The ALPS Sector Dividend Dogs ETF (SDOG) targets high dividend-paying U.S. large-cap stocks across sectors, offering income-focused, diversified exposure with a structural tilt toward mature, higher-yielding sectors. SDOG trades at a significant discount to the S&P 500 with a forward P/E of 12.7x but exhibits lower earnings growth and profitability compared to the benchmark. Despite its high dividend yield of 4.0%, SDOG has a mixed performance record, higher volatility, and lower dividend growth compared to peers, warranting a cautious outlook.
As the market digests the ongoing impacts of global tariff uncertainty and a shifting economic backdrop, income-oriented investors are once again turning their attention to resilient strategies. In this environment, the ALPS Sector Dividend Dogs ETF (SDOG) might just be one of the more stable dogs in the fight.
With a new year and a new set of market conditions comes an opportunity to refresh. Top dividend ETF SDOG, for example, recently saw its index updated, with several stocks cycling in and out.
Looking at an uncertain portfolio for 2025? You wouldn't be alone in doing so.