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WisdomTree U.S. Large Cap Dividend ETF: Visibility Limited, But Shares Are Getting Attractive

Published Tue, 31 Mar 2020 18:08:33 -0400 on Seeking Alpha

DLN invests in large-cap and giant-cap dividend stocks in the United States.
Many of these stocks have consistently increase their dividends in the past many years.
DLN’s shares are trading at a slight discount to their historical average.
ETF Overview
WisdomTree U.S. Large Cap Dividend ETF (DLN) focuses on large-cap and giant-cap dividend stocks in the United States. DLN tracks the WisdomTree U.S. Large Cap Dividend Index. The fund selects 300 largest companies by market cap from the WisdomTree Dividend Index. Its selection results in large-cap and giant-cap stocks that have competitive positions over their smaller peers. Many stocks in DLN’s portfolio are able to consistently increase their dividends annually. Although stocks in DLN’s portfolio are trading at a slight discount to their historical averages, given limited visibility due to COVID-19, we think investors may want to desire higher margin of safety. Therefore, conservative investors may want to wait on the sidelines or add shares incrementally to reduce the risk.
Data by YCharts
Fund Analysis
A diversified portfolio of large-cap and giant-cap stocks
DLN constructs its portfolio by selecting the 300 largest companies by market cap from the WisdomTree Dividend Index. The index does not weight each stock by dividend yield. Rather, it imposes a forward-looking approach and weight each stock by the total amount of dividends (not per share, but total dividend amount) it is expected to pay in the next year. This approach favors large-cap and giant-cap stocks as these stocks usually pays larger total amount of dividends than mid and small-cap stocks. As can be seen from the table below, giant-cap and large-cap stocks represent about 56.8% and 37.5% of DLN’s portfolio respectively.

Source: Morningstar
As we know, large-cap and giant-cap stocks are stocks that are much better positioned to weather any storm. In fact, these are stocks that have competitive positions. For... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
PHILIP MORRIS INTERNATIONAL 74.90   14.9 5.03 4.68 6.12
AT&T 38.38   16.1 2.38 2.04 5.43
EXXON MOBIL 71.98   17.3 4.15 3.48 4.83
VERIZON COMM 60.43   15.8 3.83 2.46 4.04
PFIZER 37.28   17.0 2.19 1.44 3.85
JOHNSON & JOHNSON 130.43   21.6 6.03 3.80 2.93
JPMORGAN CHASE 117.91   12.0 9.79 3.60 2.74
PROCTER & GAMBLE 122.77   90.3 1.36 2.98 2.49
APPLE 223.08   19.0 11.73 3.08 1.42
MICROSOFT 137.52   27.1 5.07 1.84 1.35

PHILIP MORRIS INTERNATIONAL - PM
PHILIP MORRIS INTERNATIONAL - PM  


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