Investors looking for stocks with impressive track records of dividend growth often turn to large-caps, but some smaller companies have their own noteworthy histories of steadily rising payouts. That includes mid-caps and the theme of mid-cap dividend growth can be accessed via the ProShares S&P MidCap 400 Dividend Aristocrats ETF (BATS: REGL).
REGL provides access to quality dividend growers in the mid-cap category. REGL tracks a mid-cap Dividend Aristocrats Index, which requires 15 consecutive years of increased dividends for inclusion. This ProShares fund is the only ETF to focus on members of the S&P MidCap 400 Index that have boosted payouts for at least 15 years.
REGL, which debuted in early 2015, holds 44 stocks with an average market capitalization of $5.16 billion. Historical data confirm steady dividend growers provide investors with a significant advantage over stocks that do not pay dividends or those that cut or suspend payouts.
“Companies that consistently grow their dividends tend to be high quality with long histories of profit and growth, strong fundamentals and stable earnings, and management teams with conviction. These features have generally enabled dividend growers to withstand repeated market turmoil and still deliver strong returns with lower volatility,” according to ProShares.
For example, the S&P MidCap 400 Dividend Aristocrats Index refines the mid-cap sweet spot by screening the benchmark S&P MidCap 400 for high-quality companies with at least 15 consecutive years of dividend growth and caps each sector at a maximum 30% to limit overexposure and equally weights holdings to ensure even greater diversification. Only 12% of the larger S&P mid-cap universe makes the cut and is included in the resulting portfolio of mid-cap dividend aristocrats.