Investors have faced some contrasting narratives this year. Entering 2023, the narrative suggested doom and gloom, rising rates, and a looming recession. Now, the S&P 500 has risen nearly 15% YTD, with markets stubbornly moving forward and earnings mostly stable. Where does that leave investors? It may be worth taking a look at a strategy like SDOG, which invests in dividend stocks in an equal-weight sector index version of the S&P 500.
SDOG, the ALPS Sector Dividend Dogs ETF, tracks the S-Network Sector Dividend Dogs Index. The strategy looks for dividend stocks that fit the so-called “Dogs of the Dow” theory that crafts ten equal sectors with the highest dividend-yielding stocks. Charging 36 basis points (bps), the strategy has returned 13.1% over the last three years. So, what kind of stocks does the ETF hold? Consider the following trio as examples.
SDOG holds Newell Brands, Inc. (NWL), for example. NWL, a consumer brand name, holds brands like Elmer’s Glue, Sharpie, and Graco. Categorized as a consumer defensive sector firm, it has a 12 forward P/e ratio, per YCharts, with a 2.7% forward dividend yield. NWLs also returned more than 2% in that time.
The strategy also holds Prudential Financial, Inc. (PRU). The stock, of course, falls into the financial services sector, a diversified insurance company that also includes asset manager PGIM. PRU also picks up about 40% of its earnings abroad, thanks to its efforts in Japan. The firm has seen 18.5% year-over-year quarterly revenue growth with a 5.5% forward dividend yield. It also sits on a 7.6 forward P/e ratio.
Finally, investors can also find the massive tech firm Intel (INTC) in SDOG. The world’s largest producer of chips, INTC, of course, stands out as a classic among dividend stocks thanks to its size. The firm has a trailing 3% dividend yield. Those three stand out as the kind of dividend stocks investors can find in SDOG, firms that may be well positioned for an uncertain Fall.
vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for SDOG, for which it receives an index licensing fee. However, SDOG is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of SDOG.