REGL: Impressive Dividend Growth, But Pay Attention To Valuation And Quality

Vasily Zyryanov profile picture
Vasily Zyryanov
1.82K Followers

Summary

  • REGL is a smart-beta fund designed to track the performance of equally-weighted mid-size U.S. companies that managed to achieve at least 15 consecutive years of DPS increases.
  • The article delves into the changes the portfolio has undergone since July 2021.
  • The key takeaway is that REGL should be regarded as more of a long-term income growth vehicle given its outstanding dividend growth credentials.
  • At the same time, large exposure to overvalued mid-caps is simply worrisome. Quality is yet another risk worth paying attention to. Thus, I maintain the Hold rating.

Golden crown with dark background

LarsHallstrom/iStock via Getty Images

ProShares S&P MidCap 400 Dividend Aristocrats ETF (BATS:REGL) is a smart-beta fund designed to track the performance of equally-weighted mid-size U.S. companies that managed to achieve at least fifteen consecutive years of DPS increases (with caveats).

Scatter plot

Created by the author using data from Seeking Alpha and the fund

NOBL dividend growth

Seeking Alpha

REGL dividend growth

Seeking Alpha

Returns table

Created by the author using data from the fund and Quant data from Portfolio Visualizer

Returns chart

Seeking Alpha

This article was written by

Vasily Zyryanov profile picture
1.82K Followers
Vasily Zyryanov is an individual investor and writer.He uses various techniques to find both relatively underpriced equities with strong upside potential and relatively overappreciated companies that have inflated valuation for a reason.In his research, he pays much attention to the energy sector (oil & gas supermajors, mid-cap, and small-cap exploration & production companies, the oilfield services firms), while he also covers a plethora of other industries from mining and chemicals to luxury bellwethers.He firmly believes that apart from simple profit and sales analysis, a meticulous investor must assess Free Cash Flow and Return on Capital to gain deeper insights and avoid sophomoric conclusions.While he favors underappreciated and misunderstood equities, he also acknowledges that some growth stocks do deserve their premium valuation, and its an investor's primary goal to delve deeper and uncover if the market's current opinion is correct or not.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

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