Published Fri, 11 Dec 2020 06:21:32 -0500 on Seeking Alpha
Seeking AlphaETF AnalysisProShares S&P Midcap 400 Dividend Aristocrats ETF: More Attractive Than The Large-Cap AlternativeDec. 11, 2020 6:21 AM ET|| About: ProShares Trust - ProShares S&P Midcap 400 Dividend Aristocrats ETF (REGL), Includes: NOBLby: Michael A. Gayed, CFAMichael A. Gayed, CFA The Lead-Lag ReportAnticipate Corrections and Volatility with Award Winning ResearchSummaryMid-cap dividend growers are a special breed as they tend to balance both growth expectations and income expectations adroitly.
REGL offers better yields, owns companies with higher earnings potential, is cheaper, and has a more attractive sector mix than NOBL.
REGL offers considerable exposure to cyclicals such as financials and industrials but is also significantly underweight energy.
"And I had an old-fashioned idea that dividends were a good thing."- James MacArthur
Big picture case for REGL
Patrons of The Lead-Lag Report would note that over recent weeks, I've been commenting about the recent outperformance of dividend-themed ETFs. As mentioned in the timeline of The Lead-Lag Report, the major dividend growers of the S&P 500 have beaten the index over the last month. If this is a space you want to explore, investors may consider looking at the ProShares S&P Midcap 400 Dividend Aristocrats ETF (REGL). Unlike the ETF in the image above which tracks the largest dividend-paying companies in the S&P 500 (NOBL), REGL tracks the S&P MidCap 400 Dividends Aristocrats Index; incidentally, this is the only ETF that focuses exclusively on this index.
To qualify for this index, it is not enough for companies to only have paid dividends, but to also have grown them for 15 successive years! 15 is quite a difficult barrier to pass, more so for mid-caps. Large-caps tend to be in a more mature state in their growth profile and often tend to have more resilient balance sheets, so a 15-year track record of growing cash distributions is not too challenging a mark for... Read more
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