Pfizer and Merck combine for over 16% of the Health Care Select Sector SPDR (NYSEArca: XLV), but the ETF has been a superior bet in 2013. Those stocks are both up more than 18%, but that is nothing compared to the 39.4% XLV has returned.
Plus, Merck is not the dividend raiser XLV’s largest holding, Johnson & Johnson (NYSE: JNJ) is. Merck’s 2011 dividend hike was its first since 2004. J&J has a multi-decade dividend increase streak going. In a testament of XLV’s strength, it has outperformed J&J by over 900 basis points in 2013. [XLV Moves Into Third Place Among Sector ETFs]
Investors that cannot decide among the Dow’s tech dividend dogs can consider the First Trust NASDAQ Technology Dividend Index Fund (NasdaqGS: TDIV). Up more than 19%, TDIV crushed Cisco and narrowly beat Intel this year. Along with Microsoft, those stocks combine for 23.2% of TDIV’s weight.
First Trust NASDAQ Technology Dividend Index Fund
Tom Lydon’s clients own shares of TTFS, Intel, Microsoft, McDonald’s, Pfizer and GE.