VSDA - VSDA: Exploring This 2.40% Yielding Monthly Paying Dividend Growth ETF

2024-05-20 05:52:12 ET

Summary

• VSDA employs a relatively complex system to select 75 U.S. securities with strong dividend growth track records. Its expense ratio is 0.35%, and the ETF manages $275 million in assets.
• The approach results in a stronger portfolio than the ProShares S&P 500 Dividend Aristocrats ETF. My analysis reveals nearly all of VSDA's fundamental metrics are superior.
• The Fund now trades at 19.38x forward earnings and yields 2.40% at current prices. It also features stronger earnings growth, and its constituents are on an average 35-year dividend growth streak.
• VIG is another option for DGI investors. While its dividend yield is under 2%, its constituents' earnings growth rates and dividend payout ratios are more favorable. It remains the safer long-term play.
• Still, there's a place in the market for VSDA. At a minimum, it should attract funds from NOBL shareholders, and could even pull some market share away from similar-yielding funds like DGRO.

Investment Thesis

I last reviewed the VictoryShares Dividend Accelerator ETF ( VSDA ) on May 14, 2023, advising readers it appeared strongly fundamentally than the ProShares S&P 500 Dividend Aristocrats ETF ( NOBL ) but weaker than the Vanguard Dividend Appreciation ETF ( VIG ). In approximately one year since, all three ETFs performed as expected, with VSDA up 13.69%....

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