EUDG’s nearly 200 constituents are weighed on the basis of annual dividends paid and it is a lineup that turns up some familiar names. However, country selection is critical when evaluating European dividend markets. EUDG obliges with a combined 47.3% weight to the U.K. and Switzerland, two of the region’s better dividend markets. [To Europe for Dividends]
Germany and France combine for just over a quarter of EUDG’s country allocation.
Highlighting Switzerland’s importance in the Europe dividend conversation, Novartis (NYSE: NVX), Nestle (PK: NSRGY) and Roche are the new ETF’s top-three holdings at a combined weight of almost 16%.
European consumer staples and health care stocks are among the region’s better dividend destinations at the sector level and those groups combine for almost 37.5% of EUDG’s weight. Importantly, there is significant opportunity for European dividend growth.
“While the United States is setting new highs for its Dividend Stream®, Europe’s earnings and dividends—similar to the general European economy—are still catching up to their highs set prior to the 2008–09 global financial crisis. Europe needs dividends to grow at least 37% more before the aggregate dividends from these firms reach their 2008 levels,” said WisdomTree Research Director Jeremy Schwartz in a note out earlier this week.
The WisdomTree Europe Dividend Growth Index has a dividend yield of 3.17%. EUDG charges 0.58% per year.