Coming off a year in which it gained 27.4% while hauling in $1.81 billion in new assets, the ProShares S&P 500 Aristocrats ETF (CBOE: NOBL) appears poised for success in 2020. That success could be facilitated by late-2019 dividend growth as well as expected payout increases coming this year.
NOBL tracks the S&P 500 Dividend Aristocrats Index, targets the cream of the crop, only selecting components that have increased their dividends for at least 25 consecutive years. Consequently, investors are left with a portfolio of high-quality, sustainable dividend payers.
“For Q4 2019, aggregate increases amounted to $11.97 billion, up 1.0%, from Q4 2018’s $11.85 billion. Aggregate dividend cuts, however, decreased 69.9% to $1.35 billion from $4.48 billion for Q4 2018, a period which included the $3.82 billion General Electric dividend cut,” said S&P Dow Jones Indices in a recent note.
That fourth-quarter dividend growth was meaningful for NOBL as the ProShares ETF jumped more than 7% in the last three months of 2019.
“For the year ending 2019, net dividends rose $45.4 billion, compared to a gain of $58.4 billion for 2018, as increases were $56.6 billion versus $66.5 billion, and decreases were $11.1 billion compared to $8.1 billion for the prior period,” notes S&P Dow Jones.
More Good News For Growth
Improving earnings growth could bolster dividend growth in 2020. Investors should consider quality dividend growth stocks that typically exhibit stable earnings, solid fundamentals, strong histories of profit and growth, commitment to shareholders, and management team convection in their businesses.
“On a per-share basis, S&P 500 Q4 2019 dividend payments for the S&P 500 increased 7.19% to a record-setting $15.21, from the Q4 2018’s $14.19. On an aggregate basis, index components paid $126.4 billion in dividends this quarter, also a record, up from $119.8 billion in Q4 2018,” according to S&P Dow Jones. “For the year, the index paid a record $56.24 per share, setting its eighth consecutive record year, up from 2018’s $53.75, with an aggregate $485.4 billion to shareholders, compared to 2018’s $456.3 billion.”
NOBL is home to 57 stocks, many of which far exceed the 25-year dividend increase streak requirement, but with last year’s round of payout growth, the fund could see some new additions this year.
Bolstering the case for NOBL this year are estimates indicating that S&P 500 dividend growth could return to a double-digit rate in 2020.
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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.