Seeking Alpha

Top Holdings Of Dividend ETFs (Part 1: The Top 50 In November 2019)

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Includes: AAPL, ABBV, CVX, IBM, INTC, JNJ, JPM, KO, MO, MSFT, PEP, PFE, PG, PLD, PM, SPG, T, VZ, WFC, XOM
by: FerdiS
FerdiS
Dividend Growth Investing, portfolio strategy, long-term horizon, Value
Summary

This article presents the top 50 holdings of 50 dividend-paying ETFs.

Two stocks from the Information Technology sector top the list, replacing two from the Communications Services sector from May's edition.

Dividend growth investors can compare their own portfolios to the top 50 and identify candidates for analysis and investment.

Part 2 of this article will showcase the top 7 stocks in each GICS sector.

From time to time, I compile a list of the top 50 holdings of dividend ETFs. I find the exercise insightful and worthwhile. Comparing my portfolio to the top holdings of dividend ETFs is informative, as it helps me to identify candidate stocks for analysis and possible investment.

Below, I'll provide a brief summary of the methodology. For more details, please refer to previous editions in this series. The June 2017 edition explains the methodology in detail, while the December 2016 is worth revisiting if you want to learn about dividend ETFs and ETF resources.

In the May 2019 edition, I noted there were no Real Estate sector stocks in the top 50 holdings. The reason is that the dividend ETFs I analyzed focus on equity investment. For this article, I decided to add five dividend-paying ETFs that invest in real estate equities.

Methodology

The issuers of ETFs provide data about the holdings of each ETF, including the percentage of assets under management allocated to each holding. I collect these data from established dividend-paying ETFs and compile a spreadsheet with tickers of the top 25 holdings in each ETF, along with the relative weight of each holding.

To rank the top holdings, I use the relative weight of each holding and score tickers of the top 25 holdings proportionally, favoring larger investments over smaller ones within the same ETF. Then I assign weights to each ETF based on the total assets under management. Rather than doing so proportionally, I use a log-based formula:

w = floor (log10 (assets in millions))

  • ETFs with assets between $100 million and $1,000 million get a weight of 2.
  • ETFs with assets under $10,000 million (but ≥ $1,000 million) get a weight of 3.
  • ETFs with assets under $100,000 million (but ≥ $10,000 million) get a weight of 4.
  • ETFs with assets under $1,000,000 million (but ≥ $100,000 million) get a weight of 5.

With proportional scores assigned to each holding per ETF and weights assigned to each ETF, I simply calculate a weighted sum to get an aggregate score for each holding.

Sorting the aggregate scores in descending order determines the rank of each holding.

Note that I exclude stocks that don't pay dividends, such as Berkshire Hathaway (NYSE:BRK.A) (BRK.B) that would have been ranked #40 otherwise. As a dividend growth investor, I'm mostly interested in stocks that pay ever-increasing dividends.

Dividend ETF Database

I used ETFdb's screener to identify dividend ETFs for this analysis, limiting the search to dividend and real estate ETFs in North America that have positive 3-year returns. Additionally, I excluded ETFs with assets under management below $100 million and limited the number of real estate ETFs to the top five based on assets under management.

The following table lists the 50 ETFs I analyzed, sorted by assets under management (in millions of dollars). The data source is ETFdb and the data presented in the table were extracted on 28 November 2019:

Below, the 50 ETFs are presented in tabular form so readers can more easily reference the data.

Ticker

Exchange-Traded

Fund

Asset

Class

Assets

(Millions)

No. of

Holdings

3-Year

Returns

Annual

Dividend

Yield

Dividend

Frequency

Expense

Ratio

01

VTI

Vanguard Total Stock Market ETF

Equity

$133,868

1,587

48.56%

1.71%

Quarterly

0.03%

02

VIG

Vanguard Dividend Appreciation ETF

Equity

$41,017

182

53.16%

1.72%

Quarterly

0.06%

03

VNQ

Vanguard Real Estate Index Fund

Real Estate

$37,474

182

33.13%

3.37%

Quarterly

0.12%

04

VYM

Vanguard High Dividend Yield ETF

Equity

$28,559

404

35.76%

3.05%

Quarterly

0.06%

05

SDY

SPDR S&P Dividend ETF

Equity

$19,783

113

34.52%

2.36%

Quarterly

0.35%

06

DVY

iShares Select Dividend ETF

Equity

$18,375

101

31.29%

3.34%

Quarterly

0.39%

07

SCHD

Schwab US Dividend Equity ETF

Equity

$11,256

100

45.02%

2.91%

Quarterly

0.06%

08

DGRO

iShares Core Dividend Growth ETF

Equity

$9,815

479

54.89%

2.17%

Quarterly

0.08%

09

FVD

First Trust Value Line Dividend Index

Equity

$9,113

189

38.41%

2.15%

Quarterly

0.70%

10

HDV

iShares Core High Dividend ETF

Equity

$7,633

75

32.19%

3.27%

Quarterly

0.08%

11

NOBL

ProShares S&P 500 Aristocrats

Equity

$6,254

58

47.52%

1.89%

Quarterly

0.35%

12

SCHH

Schwab US REIT ETF

Real Estate

$6,132

95

30.30%

2.70%

Quarterly

0.07%

13

FNDX

Schwab Fundamental U.S. Large Company Index ETF

Equity

$5,991

697

38.72%

2.08%

Quarterly

0.25%

14

PRF

Invesco FTSE RAFI US 1000 ETF

Equity

$5,560

997

34.55%

1.95%

Quarterly

0.39%

15

IYR

iShares U.S. Real Estate ETF

Real Estate

$4,585

115

38.81%

2.60%

Quarterly

0.42%

16

DON

WisdomTree US MidCap Dividend ETF

Equity

$4,110

395

28.86%

2.29%

Monthly

0.38%

17

XLRE

Real Estate Select Sector SPDR Fund

Real Estate

$3,932

33

43.76%

2.95%

Quarterly

0.13%

18

SPHD

Invesco S&P 500® High Dividend Low Volatility ETF

Equity

$3,666

51

26.09%

4.14%

Monthly

0.30%

19

DGRW

WisdomTree U.S. Dividend Growth Fund

Equity

$3,204

292

55.42%

2.31%

Monthly

0.28%

20

RWR

SPDR Dow Jones REIT ETF

Real Estate

$2,722

95

29.72%

3.22%

Quarterly

0.25%

21

EMLP

First Trust North American Energy Infrastructure Fund

Equity

$2,592

47

12.89%

3.98%

Quarterly

0.95%

22

DLN

WisdomTree US LargeCap Dividend ETF

Equity

$2,359

295

43.49%

2.64%

Monthly

0.28%

23

DES

WisdomTree US SmallCap Dividend ETF

Equity

$2,176

684

14.68%

2.58%

Monthly

0.38%

24

SPYD

SPDR Portfolio S&P 500 High Dividend ETF

Equity

$2,038

81

26.68%

4.36%

Quarterly

0.07%

25

FDL

First Trust Morningstar Dividend Leaders

Equity

$1,804

101

31.71%

3.78%

Quarterly

0.45%

26

SDOG

ALPS Sector Dividend Dogs ETF

Equity

$1,754

51

20.59%

3.35%

Quarterly

0.40%

27

QDF

FlexShares Quality Dividend Index Fund

Equity

$1,745

124

34.18%

3.63%

Quarterly

0.37%

28

SPHQ

Invesco S&P 500® Quality ETF

Equity

$1,711

99

44.98%

1.48%

Quarterly

0.15%

29

RDIV

Invesco S&P Ultra Dividend Revenue ETF

Equity

$1,637

61

28.74%

3.52%

Quarterly

0.39%

30

TILT

FlexShares Morningstar US Market Factor Tilt Index Fund

Equity

$1,502

2,214

37.71%

1.52%

Quarterly

0.25%

31

TDIV

First Trust NASDAQ Technology Dividend Index Fund

Equity

$1,092

93

53.92%

2.30%

Quarterly

0.50%

32

RDVY

First Trust NASDAQ Rising Dividend Achievers ETF

Equity

$1,031

50

48.11%

1.53%

Quarterly

0.50%

33

DHS

WisdomTree US High Dividend Fund

Equity

$951

374

27.66%

3.49%

Monthly

0.38%

34

PEY

Invesco High Yield Equity Dividend Achievers™ ETF

Equity

$910

51

25.15%

3.91%

Monthly

0.53%

35

DTN

WisdomTree US Dividend ex-Financials Fund

Equity

$817

91

24.24%

2.82%

Monthly

0.38%

36

DTD

WisdomTree US Total Dividend ETF

Equity

$802

873

40.88%

2.58%

Monthly

0.28%

37

SMDV

ProShares Russell 2000 Dividend Growers ETF

Equity

$778

64

24.99%

2.01%

Quarterly

0.40%

38

REGL

ProShares S&P MidCap 400 Dividend Aristocrats ETF

Equity

$768

52

28.86%

1.85%

Quarterly

0.40%

39

CDC

VictoryShares US EQ Income Enhanced Volatility Weighted ETF

Equity

$674

101

29.05%

2.99%

Monthly

0.35%

40

DIV

Global X SuperDividend U.S. ETF

Equity

$566

48

17.68%

7.57%

Monthly

0.45%

41

OUSA

O'shares FTSE US Quality Dividend ETF

Equity

$562

140

43.94%

2.36%

Monthly

0.48%

42

QDEF

FlexShares Quality Dividend Defensive Index Fund

Equity

$470

158

39.53%

5.89%

Quarterly

0.37%

43

CDL

VictoryShares US Large Cap High Dividend Volatility Weighted ETF

Equity

$358

101

36.83%

2.93%

Monthly

0.35%

44

PFM

Invesco Dividend Achievers™ ETF

Equity

$317

258

41.52%

1.89%

Quarterly

0.54%

45

DVP

Deep Value ETF

Equity

$316

21

36.63%

2.59%

Quarterly

0.59%

46

FNDB

Schwab Fundamental U.S. Broad Market Index ETF

Equity

$299

1,530

37.46%

2.07%

Quarterly

0.25%

47

KBWD

Invesco KBW High Dividend Yield Financial ETF

Equity

$294

40

19.36%

8.69%

Monthly

2.42%

48

DGRS

WisdomTree U.S. SmallCap Dividend Growth Fund

Equity

$130

260

20.02%

2.49%

Monthly

0.38%

49

SYLD

Cambria Shareholder Yield ETF

Equity

$109

101

29.52%

1.99%

Quarterly

0.59%

50

CSB

VictoryShares US Small Cap High Dividend Volatility Weighted ETF

Equity

$100

101

27.94%

3.10%

Monthly

0.35%

Top 50 Holdings

The following table presents the top 50 holdings ranked by aggregate score.

In the table, Rank is the stock's position when ranked by aggregate score and Freq indicates the number of ETFs containing Ticker in their top 25 holdings. Years are the number of consecutive years of dividend increases. Yield is the forward dividend yield and 5-DGR is the compound annual dividend growth rate over the 5-year period.

I also provide a fair value estimate ((FV)) to help identify stocks that trade at favorable valuations. Stocks trading below fair value are shaded green in the Price column. To estimate fair value, I reference fair value estimates from several sources, ignore the outliers (the lowest and highest values) and use the average of the median and mean of the remaining values as my fair value estimate.

Finally, Qual is a quality score based on the quality indicators presented in this article by David Van Knapp.

Stocks I own in my DivGro portfolio are highlighted in the Ticker column.

The top-ranked stock is Apple (AAPL), which appeared in the top 25 holdings of 26 of the 50 ETFs. The runner-up is Microsoft (MSFT) with 25 appearances, followed by AT&T (T) and Verizon Communications (VZ), each with 19 appearances.

The following chart presents the top 50 holdings visually ranked by aggregate score. The tickers are color-coded by GICS sector.

Here is a pie chart showing the distribution of stocks by GICS sector:

Here is an analysis of the top 50 holdings, courtesy of finbox.io:

As a virtual portfolio, the top 50 holdings have a dividend yield of 3.3% and would have returned about 19% over the past year and about 46% over the past 5 years.

Changes Since Last Time

It is informative to compare the changes in the top 10 since the last time I performed this analysis. You can review the entire list in this article:

Apart from positional shuffling, two stocks dropped out of the top 10, International Business Machines (IBM) and Pfizer (PFE). They were replaced by two stocks from the Financials sector, Wells Fargo (WFC) and JPMorgan Chase (JPM).

Stocks that moved into the top 50 are PLD, SPG, AMT, WELL, AVB, PSA, LYB, EQR, UNH, CCI, AMGN, BMY, LEG, TGT, CTL, and PEAK.

Stocks that dropped out of the top 50 are WMB, SJM, PFG, OKE, MCD, LMT, KMI, KMB, GIS, GE, F, ETR, ED, DUK, DIS, and ACN.

How Does Your Portfolio Compare?

Dividend growth investors may find it interesting to compare their own portfolios to the top 50 holdings of dividend ETFs. Are there any surprises? How many of the top 50 stocks do you own?

Comparing my portfolio to the top 50 holdings, I own every stock in the top 10 and 19 stocks in the top 20. Furthermore, I own 32 of the top 50 holdings.

Concluding Remarks

Publicly-available data on the top holdings and assets under management allows one to rank these holdings and to create a list of dividend growth stocks worthy of consideration.

For this article, I analyzed 50 dividend ETFs that invest in US equities and real estate stocks.

Two stocks from the Information Technology sector (AAPL, MSFT) top the list of 50 stocks presented. In fact, the Information Technology sector dominates the top 50 holdings with no fewer than 10 holdings. Below, the top 50 holdings are presented in tabular form so readers can more easily reference the data.

In Part 2 of this article, I'll showcase the top 7 stocks in each GICS sector. Investors looking to build a diversified portfolio might find such information useful.

Please note that I'm not recommending any of the top 50 holdings. Many of these stocks are trading above fair value and may not be suitable for investment at this time. Before investing in any of these stocks, please do a thorough analysis to determine if the stocks are worthy of your investment dollars.

Thanks for reading and happy investing!

Rank

Freq

Ticker

Company

Sector

Years

Yield

5-DGR

Price

FV

Qual

1

26

AAPL

Apple

Information Technology

8

1.15%

10.8%

267.25

241

23

2

25

MSFT

Microsoft

Information Technology

18

1.35%

12.1%

151.38

145

25

3

19

T

AT&T

Communication Services

35

5.46%

2.1%

37.38

47

21

4

19

VZ

Verizon Communications

Communication Services

15

4.08%

2.7%

60.24

66

22

5

18

XOM

Exxon Mobil

Energy

37

5.11%

5.6%

68.13

84

23

6

18

JNJ

Johnson & Johnson

Health Care

57

2.76%

6.4%

137.49

145

25

7

17

PG

Procter & Gamble

Consumer Staples

63

2.44%

3.7%

122.06

109

25

8

17

CVX

Chevron

Energy

32

4.06%

2.8%

117.13

133

24

9

17

WFC

Wells Fargo

Financials

9

3.75%

7.4%

54.46

59

20

10

16

JPM

JPMorgan Chase

Financials

9

2.73%

12.8%

131.76

134

21

11

16

IBM

International Business Machines

Information Technology

24

4.82%

10.9%

134.45

166

22

12

15

INTC

Intel

Information Technology

5

2.17%

5.9%

58.05

61

24

13

15

ABBV

AbbVie

Health Care

7

5.38%

17.5%

87.73

116

17

14

14

PFE

Pfizer

Health Care

9

3.74%

7.2%

38.52

42

24

15

14

PLD

Prologis

Real Estate

6

2.32%

11.4%

91.55

74

14

16

13

PEP

PepsiCo

Consumer Staples

47

2.81%

9.4%

135.83

132

24

17

12

PM

Philip Morris International

Consumer Staples

12

5.64%

4.8%

82.93

99

19

18

12

KO

Coca-Cola

Consumer Staples

57

3.00%

6.9%

53.40

49

23

19

12

SPG

Simon Property

Real Estate

10

5.56%

12.6%

151.21

182

19

20

12

MO

Altria

Consumer Staples

50

6.76%

9.7%

49.70

62

17

21

12

HD

Home Depot

Consumer Discretionary

10

2.47%

21.4%

220.51

219

24

22

12

CSCO

Cisco Systems

Information Technology

9

3.09%

14.5%

45.31

50

24

23

12

MRK

Merck

Health Care

8

2.80%

2.2%

87.18

94

25

24

11

AMT

American Tower

Real Estate

9

1.78%

22.3%

214.03

189

18

25

10

CMCSA

Comcast

Communication Services

12

1.90%

14.2%

44.15

52

21

26

9

CAH

Cardinal Health

Health Care

23

3.50%

10.2%

55.03

71

17

27

9

WMT

Walmart

Consumer Staples

46

1.78%

2.7%

119.09

104

24

28

9

TXN

Texas Instruments

Information Technology

16

2.99%

19.7%

120.21

112

24

29

9

PPL

PPL

Utilities

18

4.85%

3.5%

34.03

37

18

30

9

SO

Southern

Utilities

19

4.00%

3.4%

61.99

57

19

31

8

WU

Western Union

Information Technology

5

2.98%

8.7%

26.88

29

16

32

8

WELL

Welltower

Real Estate

n/a

4.11%

n/a

84.57

72

12

33

7

QCOM

Qualcomm

Information Technology

16

2.97%

13.3%

83.55

89

18

34

7

BAC

Bank of America

Financials

6

2.16%

68.3%

33.32

37

19

35

7

AVB

AvalonBay Communities

Real Estate

8

2.84%

6.9%

214.41

198

15

36

7

V

Visa

Information Technology

12

0.65%

20.4%

184.51

176

25

37

7

PSA

Public Storage

Real Estate

n/a

3.80%

n/a

210.68

207

18

38

7

D

Dominion Energy

Utilities

16

4.42%

8.2%

83.11

86

18

39

7

LYB

LyondellBasell Industries

Materials

9

4.54%

14.9%

92.54

117

16

40

7

EQR

Equity Residential

Real Estate

n/a

2.67%

n/a

85.10

74

14

41

7

UNH

Unitedhealth

Health Care

10

1.54%

26.8%

279.87

303

24

42

7

CCI

Crown Castle International

Real Estate

6

3.59%

n/a

133.66

115

12

43

6

AMGN

Amgen

Health Care

9

2.47%

22.9%

234.72

232

23

44

6

BMY

Bristol-Myers Squibb

Health Care

10

2.88%

2.7%

56.94

75

22

45

6

MMM

3M

Industrials

61

3.39%

16.5%

169.77

178

24

46

6

LEG

Leggett & Platt

Consumer Discretionary

48

3.06%

4.8%

52.32

54

18

47

6

TGT

Target

Consumer Discretionary

52

2.11%

9.8%

125.01

117

14

48

6

CTL

CenturyLink

Communication Services

n/a

6.90%

n/a

14.49

18

4

49

6

PEAK

Healthpeak Properties

Real Estate

n/a

4.24%

n/a

34.88

30

6

50

6

AVGO

Broadcom

Information Technology

9

3.35%

55.1%

316.21

346

16

Disclosure: I am/we are long AAPL, ABBV, ACN, ADM, ADP, AFL, AMGN, AMZN, ANTM, APD, AVGO, BA, BLK, BNS, CB, CMCSA, CMI, CNI, COST, CRM, CSCO, CVS, CVX, D, DGX, DIS, DLR, FDX, GD, GILD, GOOG, HD, HON, HRL, IBM, ICE, INTC, ITW, JNJ, JPM, KO, LMT, LOW, MA, MAIN, MCD, MDT, MMM, MO, MRK, MSFT, NEE, NFLX, NIE, NKE, NNN, NSRGY, O, ORCL, PEP, PFE, PG, PM, PNW, PSA, QCOM, ROST, RTN, RY, SBUX, SKT, SNA, SPG, SWK, SYK, T, TD, TJX, TROW, TRV, TSM, TXN, UNH, UNP, UPS, V, VLO, VZ, WBA, WFC, WPC, XOM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.