ETFs to Access Tomorrow's Dividend Growth... Today

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Specifically, Reality Shares has a suite of ETFs that focus on U.S. companies expected to raise dividends ahead, including the Reality Shares DIVCON Leaders Dividend ETF (BATS: LEAD), Reality Shares DIVCON Dividend Defender ETF (BATS: DFND) and Reality Shares DIVCON Dividend Guard ETF (BATS: GARD).

The DIVCON ETF suite tracks companies based on the dividend growth of the broad market, and also those stocks most likely to increase their dividends while avoiding and even sometimes capitalizing on those stocks more likely to reduce dividends.

Specifically, the DIVCON dividend health rating system tries to forecast and rank companies’ ability to increase or decrease dividends in the next 12 months by evaluating each firm based on expected dividend growth, free cash flow, earnings per share growth, recent dividend actions, buybacks and repurchases, Bloomberg fundamentals and Altman z-scores. Each company is scored into one of five categories, with DIVCON representing the healthiest and DIVCON showing the weakess.

SEE MORE: A Different Type of Dividend Growth ETF

Ervin pointed out that 97% of DIVCON5 companies have raised dividends from January 2001 through December 2015. Moreover, components in the DIVCON Leaders Dividend Index did not cut dividends during the financial crisis.

“The true power of the DIVCON model lies in its ability to distinguish high quality companies from low quality companies,” Ervin added.

Financial advisors who are interested in learning more about dividend strategies can watch the webcast here on demand.