SDOG’s underlying index, which has a weighted average market value of $77.8 billion, allocates about 40% of its combined weight to financial services, energy, healthcare and consumer discretionary stocks. The index has a price-to-earnings ratio of 16, implying a discount to the S&P 500.
“After several quarters of double digit year-over-year earnings growth, the market is still looking expensive. The forward P/E ratio of the S&P 500 still sits at around 19,” according to ETF Daily News. “The forward P/E of SDOG? Just 14. That kind of valuation yields two benefits. First, it can provide some much needed downside protection in the event that the market turns south. Second, buying at that valuation is akin to buying stocks off the bargain rack.”
Dividend growth as a means of trumping inflation could and arguably should serve to highlight the advantages of the ETFs that focus on dividend growth stocks. That group is comprised of well-established ETFs that emphasize dividend increase streaks as well as a new breed of funds that look for sectors chock full of stocks that have the potential to be future sources of dividend growth.
Several of SDOG’s holdings have lengthy dividend increase streaks. The $2.2 billion ETF charges 0.4% per year, or $40 on a $10,000 investment.
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