Navigate uncharted waters with DIVS
Investors continue to bet on dividend-paying stocks as cash looks more attractive in the current environment, defined by decades of high inflation and rising rates, than future corporate earnings.
Since the start of 2020, companies that pay high levels of dividends have continued to outperform those with lower payouts, while stocks of companies that invest the most money in buybacks have lagged behind. compared to those with the lowest redemptions, the Wall Street Journal reported.
According to the Wall Street Journal, the change shows the premium investors are paying for regular cash payments rather than the promise of future profits. This preference has only intensified as the Fed embarked on an ambitious campaign to raise interest rates to contain inflation.
the SmartETF Dividend Builder ETF (DIVS)directed by Guinness Atkinson Asset Managementis an attractive offering for investors seeking exposure to high-quality dividend-paying stocks.
So far in 2022, DIVS has had dividend updates from 17 of its 35 holdings, and despite the current difficult economic climate, no company has announced dividend cuts or cancellations, according to SmartETFs.
Fifteen companies announced increases to their 2022 dividends from 2021, and two companies announced flat dividends from 2021, according to SmartETFs. This dividend growth builds on past momentum, with no cancellations in 2021 and 2020.
DIVS is actively managed and typically holds approximately 35 equally weighted positions.
The fund looks for companies that meet the following criteria: those that have achieved a real cash flow on investment of at least 10% on capital for each of the last 10 years; companies with little debt; and value, looking to buy stocks at a time when the target companies are trading at the low end of their peers, at the bottom of their history and at the bottom of their industry, according to the company’s website.
For more news, insights and strategy, visit the Dividend channel.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.