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WisdomTree U.S. Quality Dividend Grade ETF: Investors Should Be Rewarded In The Long-Term

Published Sun, 03 May 2020 10:41:43 -0400 on Seeking Alpha

DGRW focuses on quality dividend stocks that have solid growth outlook.
The fund has better performance than its peers such as VIG and SCHD.
DGRW pays a 2.6%-yielding dividend, and this dividend should continue to grow in the long-term.
ETF Overview
The WisdomTree U.S. Quality Dividend Grade ETF (Nasdaq: DGRW) focuses on quality dividend stocks that have good growth forecasts. Instead of finding stocks that have consecutive years of dividend growth, the fund selects stocks that have good quality factors such as better return on equity and return on assets. In addition, DGRW also selects stocks based on their earnings growth outlook as this momentum should eventually translate to strong dividend growth. Since its inception, DGRW has outperformed its peers that also seek to include quality dividend stocks but with different selection criteria. DGRW pays a 2.65%-yielding dividend and should be a good investment choice for dividend growth investors with a long-term investment horizon.
Fund Analysis
DGRW constructs its portfolio based on quality and forward earnings growth information
DGRW constructs its portfolio by looking at three important criteria: 1) return on equity (ROE), 2) return on assets (ROA), and 3) forward earnings growth forecast. The focus on ROA and ROE helps to ensure the quality of stocks in its portfolio. This is because while a company can leverage to improve its ROE, it will usually reduce its ROA. Therefore, by including both ROE and ROA, DGRW reduces the risk of including stocks with high leverage. Its inclusion of earnings growth forecast should result in a portfolio of good growth outlook.
DGRW's top holdings have increased their dividends consistently every year
Unlike some of its peer funds, DGRW does not specifically select stocks based on their past consecutive years of dividend growth. However, its selection criteria actually result in a portfolio of stocks that have consecutive years of dividend growth. As can be... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
VANGUARD DIVIDEND APPRECIATION ETF 120.84   0.0 0.00 0.00 1.58


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