Stocks with steady dividend yields reassure investors of a company’s strong financial health. Additionally, dividend-paying stocks typically outperform those that do not pay over the long haul, with less volatility, due to the compounding effect of dividends on the investment’s overall return.
DVY, which has a trailing 12-month dividend yield of 3%, offsets its utilities exposure with robust exposure to cyclical sectors. For example, cyclical consumer discretionary, financial services and industrial names combine for about 40% of the ETF’s weight.
Home to $17.4 billion in assets under management, DVY is one of the largest U.S. dividend ETFs. It is also one of the oldest, having debuted in November 2003.
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Tom Lydon’s clients own shares of DVY.