Exchange-Traded Funds (ETFs) have become increasingly popular amidst calls for heightened diversification in the capital markets. A domain for income-focused investors, ETFs continue to offer a wide array of benefits that many investors are finding it hard to ignore. While investors have many choices when it comes to ETFs funds, ProShares S&P 500 Dividend Aristocrats (NOBL) continue to beat the competition when it comes to dividend stock investing.
Most investors are aware that dividend stocks are stocks that pay money to their stock owners, but not everyone knows that there are “Dividend Aristocrats.” So what is a Dividend Aristocrat? The short answer is that it is a company that has paid a dividend and also increased its dividend for at least 25 years. Currently, there are 66 Dividend Aristocrat stocks. (See the complete list at the bottom).
One of the easiest and fastest ways to buy all the Dividend Aristocrat stocks is to buy an ETF like ProShares S&P 500 Dividend Aristocrats (NOBL) that has all of the stocks in one bucket.
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When it comes to investing in ETFs, it is important to note that different types of ETFs correspond to different asset classes from bonds to currencies as well as equities and commodities. Likewise, there are ETFs focused on particular market sectors as well as inverse ETFs that allow investors to bet against certain sectors or index.
NOBL Low Expense Ratio
With over $5 billion in assets under management, ProShares S&P 500 Dividend Aristocrats provides exposure to almost every equity investing style and market segment. The ETF stands out on the fact that it has outperformed the S&P 500 by more than 0.4% a year over the past decade. Likewise, the ETF boasts of the lowest annual expense ratio making it one of the best for generating optimum returns.
Unlike mutual funds that charge high annual expense ratio in the highs of 1%, ProShares S&P 500 Dividend Aristocrats charges 0.35%. Likewise, the ETF comes with high levels of liquidity given the trading that takes place on a daily basis as opposed to mutual funds, which are priced after market close.
NOBL Diversification Edge
Diversification is another reason why ProShares S&P 500 Dividend Aristocrats stands out, as an ideal ETF for gaining greater exposure in the equity market. The ETF owned all of the 57 dividend-paying stocks in the S&P 500 in 2020. The ETF has since added seven new dividend-paying stocks in its portfolio.
Some of the stocks that ProShares S&P 500 Dividend Aristocrats track include Johnson & Johnson, Walmart, Target and Chevron. The fact that the companies are spread in various industries provides widespread exposure, consequently protecting investors from market downturns.
In addition, companies in the ProShares S&P 500 Dividend Aristocrats sell products to millions of people around the world. Likewise, they possess competitive advantages that should allow them to continue outperforming the market even in times of market recession. The diversified nature of the ProShares S&P 500 Dividend Aristocrats means it will continue to outperform the market in case of a downturn in one sector.
A dividend yield of 2.5% makes it one of the best for generating passive income in the stock market despite the equity market being in a bull run over the past ten years, the S&P 500 has had an average yield of 2%.
ProShares S&P 500 Dividend Aristocrats stands out as the best ETF for gaining exposure in the equity markets for income-focused investors. Low expense ratio, as well as diversification benefits, are some of the benefits that underscore the ETFs credentials in the industry. Likewise, the ETF has a solid risk to reward ratio as it has limited exposure to richly valued sectors such as technology.
List of Dividend Aristocrats Stocks
|Ticker||Company||Beta 1-Year||Dividend Yield|
|ADP||Automatic Data Processing||1.11||2.20%|
|APD||Air Products & Chemicals||1.04||1.90%|
|ESS||Essex Property Trust||1.03||3.40%|
|FRT||Federal Realty Investment||1.19||4.80%|
|ITW||Illinois Tool Works||1.05||2.20%|
|JNJ||Johnson & Johnson||0.67||2.80%|
|LEG||Leggett & Platt||1.43||3.70%|
|MKC||McCormick & Co||0.74||0.70%|
|PBCT||People’s United Finl||1.23||5.80%|
|PG||Procter & Gamble||0.71||2.30%|
|SWK||Stanley Black & Decker||1.47||1.50%|
|TROW||T. Rowe Price Group||1.18||2.50%|
|WBA||Walgreens Boots Alliance||0.81||4.90%|
|Exponential Moving Average (5)||81.38||Buy|
|Simple Moving Average (5)||81.5||Buy|
|Exponential Moving Average (10)||80.83||Buy|
|Simple Moving Average (10)||80.56||Buy|
|Exponential Moving Average (20)||80.25||Buy|
|Simple Moving Average (20)||79.99||Buy|
|Exponential Moving Average (30)||79.78||Buy|
|Simple Moving Average (30)||79.93||Buy|
|Exponential Moving Average (50)||78.8||Buy|
|Simple Moving Average (50)||79.06||Buy|
|Exponential Moving Average (100)||76.59||Buy|
|Simple Moving Average (100)||76.23||Buy|
|Exponential Moving Average (200)||73.91||Buy|
|Simple Moving Average (200)||71.43||Buy|
|Ichimoku Cloud Base Line (9, 26, 52, 26)||80.03||Neutral|
|Volume Weighted Moving Average (20)||79.87||Buy|
|Hull Moving Average (9)||82.08||Sell|