DIVS Offers Meaningful Exposure to Financial Sector | ETF Trends

Bank of America shared its first-quarter 2022 financial results today, reporting a smaller-than expected 13% fall in first quarter profit on Monday, as growth in consumer lending overshadowed a decline in global deal-making.

The U.S. bank earned $7.07 billion, down from $8.05 billion a year earlier. Earnings per share of 80 cents topped the 75 cents that analysts polled by FactSet had expected. Revenue totaled $23.23 billion, up 2% from a year ago; analysts had expected revenue of $23.13 billion.

“Could a slowdown in the economy happen? Perhaps,” Bank of America CEO Brian Moynihan said on the firm’s first quarter earnings call on Monday. “But right now, the economy is bigger than pre-pandemic levels.”

The financial sector is a key component of dividend ETFs. Dividend ETFs have surged in popularity in recent years as many income seekers have turned away from low-yielding fixed income instruments and are looking to equity markets for a more attractive level of income.  

There are many dividend ETFs currently available to investors, with each one offering different exposure, income generation, and total return. 

Investors must consider the quality of the dividend, however, as many high-yielding companies without strong financial stability may cut dividends under the pressure from future rising rates.

Focusing on key metrics, investors can unearth compelling products, including the SmartETFs Dividend Builder ETF (DIVS).

DIVS has 35 holdings in its portfolio, 31 of which grew their dividends in 2021. Three companies kept their dividends flat, and just one company cut its dividend. This follows the momentum from 2020, which saw 28 companies grow their dividends, six keep their dividends flat, and one company cut its dividend, according to the firm.

The average dividend growth across all 35 companies included in the fund was 6.3%, and the firm generally saw dividend payments surprise to the upside.

For more news, information, and strategy, visit the Dividend Channel.