Dividend-News

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PEY Is Not A Great Dividend ETF

Published Wed, 01 May 2019 11:44:08 -0400 on Seeking Alpha

It makes sense for investors to put their money in high-quality companies that can withstand business cycles and have shareholder-friendly management that rewards investors by consistently growing dividends for years. In my previous article, I wrote about the SPDR S&P Dividend ETF (SDY) as a great way to gain exposure to more than a hundred such stocks which have been consistently growing dividends for 20 years. The Invesco High Yield Equity Dividend ETF (PEY) also holds 50 companies with a great history of dividend growth and offers a higher dividend yield than SDY but I believe this is not a great ETF. Unlike SDY, PEY's portfolio consists of some small-cap and low-quality dividend stocks which could drag its performance in the future. The ETF is also more expensive than some of its rivals. I think income-seeking investors should steer clear of Invesco High Yield Equity Dividend ETF and consider other higher-quality funds.

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The US stock markets continue to shoot higher. Last week, the S&P-500 and the Nasdaq Composite closed on record levels after the Commerce Department’s report showed that the US economy expanded by 3.2% in the first quarter, beating economists’ estimate of 2.5%. I believe this solid performance was particularly impressive considering that this also includes the impact of the US government shutdown as well as the signs of a slowdown in the manufacturing activity. The country also witnessed strong gains in retail... Read more