PEY - SDY: This S&P Dividend Aristocrats ETF Doesn't Deserve Its Premium

• SDY holds securities inside the S&P 1500 Composite that have paid dividends for at least 20 consecutive years.
• The ETF has a trailing yield of 2.71%, which is nearly 1% higher than the S&P 500 Dividend Aristocrats ETF due to its method of weighting stocks by indicated yield.
• While SDY is probably the best Dividend Aristocrats option today, the revenue, earnings, and dividend growth rates are too low, and investors aren't getting enough of a discount for this.
• Only 20% of the fund has a double-digit five-year dividend growth rate, and the returns have trounced their peers. I'll demonstrate why dividend growth, not yield, matters most.
• I don't recommend taking out a position in SDY, but do suggest swapping it with NOBL in the event you are still a proponent of the Dividend Aristocrats strategy.

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