ETF Spotlight on SPDR S&P Dividend (NYSEArca: SDY), part of a weekly series.
Assets: $1.3 billion
Objective: Tracks the S&P High Yield Dividend Aristocrats Index (SPHYDATR), which consists of the 50 highest dividend yielding companies in the S&P Composite 1500 Index
Holdings: Top holdings include Integrys Energy Group (NYSE: TEG), Eli Lilly and Compan (NYSE: LLY) and Pitney Bowes Inc. (NYSE: PBI)
What You Should Know
- Dividend aristocrats are a special class of dividend-yielding companies in the S&P 500: they have increased dividend payouts to shareholders every year for the last 25 years
- The yield on SDY is 3.8%
- It’s one of the top performing dividend ETFs year-to-date, up 3.4%
- The top sector weights are: utilities, 24.5%; consumer staples, 16.3%; industrials, 12.9%; and financials, 10.4%
The Latest News
- After the financial crisis, many banks and other financial companies reduced or suspended dividend payments, remarks Alexander Green for Investment U. But according to Howard Silverblatt, senior index analyst at S&P, “the worst is over for dividends. Standard & Poor’s believes that a dividend recovery is under way.” [How to Play the Dividend Comeback.]
- While dividends may still be low at this point, Green points out that over time, they rise and sometimes it’s by a lot. [How to Protect Yourself from the Big Deficit.]
- Gary Gordon for ETF Expert makes another case for dividends: the markets are showing no definitive signs of a fast revival or another downturn. In that situation, Gordon suggests, you might want to go after cash flows from income ETFs or dividend-yielding ETFs. [4 Ways to Use ETFs.]
For past ETF Spotlights, visit our ETF Spotlight page.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.