DHS: Great Valuation, Great Yield, This High Dividend ETF Is A Buy

Summary

• DHS is a high-dividend ETF with over 300 holdings, but is surprisingly concentrated with 85% of assets within just 20 industries.
• I've been critical of DHS in the past. However, its 16x forward earnings valuation is one of the cheapest available, and it has solid growth rates to back it up.
• It also has 10% allocated to Integrated Oil & Gas stocks. Exxon Mobil is the top holding, and it has proven to be an excellent defender against year-over-year inflation increases.
• DHS may not be the best long-term holding in the category, especially since its fees are relatively high at 0.38%. But I do expect outperformance as investors shift more into value stocks.

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Investment Thesis

The WisdomTree U.S. High Dividend Fund (NYSEARCA:DHS) is one of the best opportunities in the dividend ETF space today. With an estimated 3.50% yield over the next twelve months, an ultra-low forward price-earnings ratio of 16x, and some excellent selections to

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SPY, SCHD either through stock ownership, options, or other derivatives. 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.