2024-03-28 01:01:51 ET
Summary
- SDVY tracks an equal-weighted basket of small- and mid-cap stocks exhibiting strong historical dividend growth characteristics. Fees are 0.60% and SDVY yields 1.75% (1.55% expected).
- DGI investors typically seek positive trends in dividend growth and earnings. However, SDVY's requirement only requires positive growth from three years ago.
- As a result, SDVY holds many high-growth companies from three years ago, but about 50% have negative one-year trailing and expected earnings per share growth.
- The likely result is low dividend growth, share price depreciation, or both. Either way, SDVY not suitable for DGI investors, and I have assigned a "sell" rating.
Investment Thesis
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For further details see:
SDVY: DGI Investors Should Avoid This Small/Mid-Cap Rising Dividend Achievers ETF