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Vanguard Value ETF Is Now Undervalued With A 2.8%-Yielding Dividend

Published Tue, 03 Mar 2020 10:41:53 -0500 on Seeking Alpha

VTV invests in U.S. large-cap value stocks.
Its top 10 holdings are stocks with good track record of growth in the past and are likely to continue to succeed in the future.
The fund delivered a total return of 185% in the past 10 years and pays a 2.8%-yielding dividend.
VTV is currently trading at a discount to its own historical average and to the S&P 500 Index.
ETF Overview
Vanguard Value ETF (VTV) owns a portfolio of U.S. large-cap value stocks. The fund seeks to track the investment results of the CRSP U.S. Large Cap Value Index. Stocks in VTV’s portfolio are large cap stocks that have a good track record of growth and will likely continue to perform well in the future. Stocks in VTV’s portfolio are also stocks that have competitive positions over their smaller peers and generally have good financial health ratings. VTV appears to be undervalued when compared to the S&P 500 Index. Its weighted average P/E ratio of its top 10 holdings is also lower than its 5-year average P/E ratio. Therefore, we think VTV currently offers good value for investors with a long-term investment horizon.
Data by YCharts
Fund Analysis
Portfolio construction results in large-cap stocks with competitive positions
VTV seeks to track the investment results of the CRSP U.S. Large Cap Value Index. This index selects stocks by using several important forward and backward-looking metrics such as projected earnings per share growth, past earnings growth, sales per share growth, etc. This portfolio construction method has resulted in a portfolio of quality stocks with good growth outlook. The table below shows VTV’s top 10 holdings. As can be seen from the table, these are large-cap companies that have been quite successful in the past. These are also companies that have competitive advantages over their peers. Its top holding Berkshire Hathaway (BRK-B) has insurance, railroad and many other businesses that consistently generate excessive cash flow. Its... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
JOHNSON & JOHNSON 130.43   21.6 6.03 3.80 2.93
JPMORGAN CHASE 117.91   12.0 9.79 3.60 2.74
BERKSHIRE HATHAWAY A 324010.00   28.5 11356.59 0.00 0.00
BERKSHIRE HATHAWAY B 214.20   0.0 0.00 0.00 0.00

JOHNSON & JOHNSON - JNJ
JOHNSON & JOHNSON - JNJ  


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