• Other large technology firms, like Cisco and Oracle, also contributed positively to DGRW over the period.5 Cisco and Oracle, which began paying in 2011 and 2009 respectively, have both already doubled their per-share dividend rate.6 Neither firm was included in the NASDAQ US Dividend Achievers Select Index over the period.
Looking Forward
Newer technology payers and growers have made the Information Technology sector the second-largest dividend-paying sector, accounting for approximately 15.6% of total dividends.7 WisdomTree believes that exposure in this sector is important when trying to represent a proxy of the dividend-growth universe in the United States.
I believe that dividend-growth stocks are attractively priced compared with traditional high-dividend-yield stocks. If the U.S. economy continues to improve and interest rates eventually increase, dividend-growth stocks may become even more important as higher-dividend-yielding stocks face pressure from reinvigorated competition that stems from higher bond yields.
1Sources: WisdomTree, Bloomberg, 11/30/07–11/30/13.
2Sources: WisdomTree, Bloomberg; Apple was a 4.4% weight in DGRW as of 7/28/14. Holdings subject to change.
3Sources: WisdomTree, Bloomberg, as of 7/28/14.
4Sources: WisdomTree, Bloomberg; Microsoft was a 4.2% weight and Intel was a 2.7% weight in DGRW as of 7/28/14.
5Sources: WisdomTree, Bloomberg; Cisco was a 2.0% weight and Oracle was a 1.1% weight in DGRW as of 7/28/14.
6Sources: WisdomTree, Bloomberg, as of 7/28/14.
7Sources: WisdomTree, Bloomberg, as of 7/28/14.
Important Risks Related to this Article
There are risks associated with investing, including possible loss of principal. Funds focusing their investments on certain sectors increase their vulnerability to any single economic or regulatory development. This may result in greater share price volatility. Please read the Fund’s prospectus for specific details regarding the Fund’s risk profile.
Dividends are not guaranteed, and a company’s future ability to pay dividends may be limited. A company currently paying dividends may cease paying dividends at any time.