In this article, we discuss 10 dividend ETFs to buy in August.
Investing in dividend exchange-traded funds (ETFs) is a well-known strategy to generate a regular stream of income, especially in times of market uncertainty. These ETFs provide exposure to many dividend-paying stocks and are more convenient and safe as compared to individual stocks.
Dividend payouts have sharply increased this year from 2020 when many companies were forced to slash their payouts in recognition of the pandemic-related market turmoil. In the second quarter of 2022, dividends set another record as the S&P 500 companies paid out $140.6 billion in dividends, up from $137.6 billion in the previous quarter. In view of this, investors are also pouring money into dividend ETFs that mainly focus on stocks that increase or regularly pay dividends to shareholders. As of June 2022, dividend ETFs have taken in approximately $25 billion in assets and the number could reach $50 billion by the end of the year, according to Bloomberg Intelligence ETF analyst Eric Balchunas. He further mentioned that investors are supporting high-yield stocks as the Federal Reserve has raised interest rates and dividend ETFs are the best investment in this regard. At the end of June, the total assets of dividend ETFs amounted to over $338.5 billion with an average expense ratio of 0.52%, according to ETF.com.
Dividend ETFs are outperforming the S&P 500, which has lost 13.6% of its value in 2022 so far. For example, iShares Core High Dividend ETF, which tracks famous dividend stocks like Exxon Mobil Corporation (NYSE:XOM), AbbVie Inc. (NYSE:ABBV), and Johnson & Johnson (NYSE:JNJ), is up 2.33% year-to-date and returned 7.23% in the past 12 months, as of the market close of August 8. Further evaluating these arguments, we will discuss the best dividend ETFs to buy in August.
Photo by Karolina Grabowska from Pexels
Our Methodology:
The ETFs mentioned in the list invest mainly in high-quality dividend stocks that offer attractive yields to investors. The major holdings of these ETFs are also mentioned to provide an in-depth analysis of these funds.
Dividend ETFs to Buy in August
10. Vanguard Dividend Appreciation Index Fund (NYSE:VIG)
Vanguard Dividend Appreciation Index Fund (NYSE:VIG) follows a passively-managed and full replication approach. The fund tracks the performance of dividend stocks that hold strong records of growing their payouts. At the end of June, the fund’s total assets amounted to over $71.3 billion. It tracks the movement of 289 dividend stocks, mainly belonging to consumer staples, energy, healthcare, and financial sectors.
At the end of 2021, Vanguard Dividend Appreciation Index Fund (NYSE:VIG) delivered a 23.5% total return by the market price. Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and The Home Depot, Inc. (NYSE:HD) are some of the fund’s major holdings, with the top 10 holdings representing 29.8% of the portfolio.
Vanguard Dividend Appreciation Index Fund (NYSE:VIG) started paying dividends in 2021 and declared a quarterly dividend of $0.69390 per share, up from $0.51310 in March 2021.
Just like Exxon Mobil Corporation (NYSE:XOM), AbbVie Inc. (NYSE:ABBV), and Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG) is also one of the prominent dividend stocks grabbing investors’ attention in 2022.
9. Vanguard High Dividend Yield Index Fund (NYSE:VYM)
Vanguard High Dividend Yield Index Fund (NYSE:VYM), launched and managed by the Vanguard Group, tracks the performance of stocks that have above-average dividend yields. Since its inception in 2006, the fund delivered an 8.20% return to shareholders. As of the end of June, the fund’s total assets came in at $55.6 billion and it has an earnings growth rate of 11%. The fund’s portfolio has 443 dividend stocks belonging to the financial, healthcare, and industrial sectors.
Chevron Corporation (NYSE:CVX) is one of the fund’s most prominent holdings, representing 2.12% of its portfolio. The energy company has a 35-year track record of consistent dividend growth, with a 5-year CAGR of 5.07%. The company pays a quarterly dividend of $1.42 per share, with a dividend yield of 3.64%, as of August 9.
At the end of Q1 2022, 53 hedge funds in Insider Monkey’s database owned stakes in Chevron Corporation (NYSE:CVX), the same as in the previous quarter. These stakes are collectively valued at nearly $28 billion. With a stake worth roughly $26 billion, Berkshire Hathaway was the company’s leading shareholder in Q1.
Diamond Hill Capital mentioned Chevron Corporation (NYSE:CVX) in its Q1 2022 investor letter. Here is what the firm has to say:
“Other top contributors in Q1 included multinational energy company Chevron Corp. (NYSE:CVX). The company benefited from increased energy demand as COVID-related economic restrictions eased in tandem with concerns regarding supply interruptions related to Russia’s invasion of Ukraine.”
8. Schwab U.S. Dividend Equity ETF (NYSE:SCHD)
Schwab U.S. Dividend Equity ETF (NYSE:SCHD) holds a modified market-cap-weighted portfolio of dividend stocks that have solid fundamentals. The fund focuses on stocks that have high-quality and sustainable dividends and also considers other financial ratios of such companies. As of August, the fund has a total of 104 holdings while its total net assets amounted to over $37.2 billion.
PepsiCo, Inc. (NASDAQ:PEP) is one of the major holdings of Schwab U.S. Dividend Equity ETF (NYSE:SCHD), accounting for 4.34% of its portfolio. The company pays a quarterly dividend of $1.15 per share, with a dividend yield of 2.63%, as of August 9. PepsiCo, Inc. (NASDAQ:PEP) has one of the strongest dividend growth records in the market, raising its payouts consistently for the past 49 years.
As of the end of Q1 2022, 62 hedge funds in Insider Monkey’s database owned stakes in PepsiCo, Inc. (NASDAQ:PEP), up from 60 in the previous quarter. These stakes hold a consolidated value of over $4.8 billion.
ClearBridge Investments mentioned PepsiCo, Inc. (NASDAQ:PEP) in its Q4, 2021 investor letter. Here is what the firm said:
“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year. After a strong year for equities, we sought to bolster more defensive areas of the portfolio and added to PepsiCo, increasing our exposure to a high-quality and stable name.”
7. iShares Select Dividend ETF (NASDAQ:DVY)
iShares Select Dividend ETF (NASDAQ:DVY) tracks the performance of an index composed of relatively high dividend US equities. The fund mainly focuses on stocks that have raised their dividends for over five years. In the past year, the fund gained 3.90% while its 5-year return came in at 33.2%, as of the market close of August 8. iShares Select Dividend ETF (NASDAQ:DVY) has total assets worth over $21.7 billion as of August and has 99 dividend stocks in its portfolio. The fund’s 12-month trailing yield stands at 3.08%, as of June 30.
Altria Group, Inc. (NYSE:MO) is the largest holding of iShares Select Dividend ETF (NASDAQ:DVY), accounting for 2.15% of the fund’s portfolio. The tobacco manufacturer has been raising its dividends consistently for the past 52 years. It offers a quarterly dividend of $0.90 per share and has an above-average yield of 8.15% in the industrial sector, as recorded on August 9.
The number of hedge funds tracked by Insider Monkey owning stakes in Altria Group, Inc. (NYSE:MO) stood at 47, growing from 39 in the previous quarter. These stakes are collectively valued at nearly $2 billion. Among these hedge funds, Rajiv Jain’s GQG Partners owned the largest stake in the company.
6. VictoryShares US EQ Income Enhanced Volatility Wtd ETF (NASDAQ:CDC)
Founded in 2014, VictoryShares US EQ Income Enhanced Volatility Wtd ETF (NASDAQ:CDC) tracks an index of 100 high-yield stocks belonging to the large-cap space. The average market cap of the fund’s holdings stood at $81.7 billion. The fund has over $2 billion worth of assets under management with an expense ratio of 0.35%. VictoryShares US EQ Income Enhanced Volatility Wtd ETF (NASDAQ:CDC) tracks the performance of 100 dividend stocks with the top 10 holdings making up 15.6% of its portfolio.
An American pharmaceutical company, Johnson & Johnson (NYSE:JNJ) is one of the prominent holdings of VictoryShares US EQ Income Enhanced Volatility Wtd ETF (NASDAQ:CDC). The company is famous among elite funds in Q1 2022, as 83 hedge funds tracked by Insider Monkey owned stakes in it, with a total value of over $7.4 billion. With a stake worth over $1.1 billion, Arrowstreet Capital was the company’s leading stakeholder in Q1.
Johnson & Johnson (NYSE:JNJ) is one of the most notable dividend stocks, as it holds a 60-year streak of consistent dividend growth. The company raised its dividend at a CAGR of 5.87% in the last five years. It offers a quarterly dividend of $1.13 per share, with a yield of 2.65%, as of August 9. In addition to JNJ, Exxon Mobil Corporation (NYSE:XOM) and AbbVie Inc. (NYSE:ABBV) also hold strong dividend growth track records.
5. Global X SuperDividend ETF (NYSE:SDIV)
Global X SuperDividend ETF (NYSE:SDIV) accesses 100 of the highest dividend-paying stocks around the world and focuses on price and yield performance. As of July, the fund’s total assets stood at nearly $771 million with an expense ratio of 0.58%. As of August 8, Global X SuperDividend ETF (NYSE:SDIV) had a 12-month trailing yield of 13.08%. The fund was founded in 2011 and currently has 110 dividend stocks in its portfolio.
Omega Healthcare Investors, Inc. (NYSE:OHI) is one of the most prominent holdings of the fund, accounting for 1.45% of its portfolio. It is an American healthcare company that specializes in related services. The company started paying irregular dividends in 1994 and has paid uninterrupted dividends for the last 19 years. Currently, it pays a quarterly dividend of $0.67 per share, with an 8.10% yield, as of August 9.
As per Insider Monkey’s Q1 2022 database, 17 hedge funds owned stakes in Omega Healthcare Investors, Inc. (NYSE:OHI), down from 20 a quarter earlier. These stakes hold a collective value of over $48.8 million.
4. SPDR S&P Global Dividend ETF (NYSE:WDIV)
SPDR S&P Global Dividend ETF (NYSE:WDIV) tracks the performance of companies that pay regular dividends and have raised their payouts for at least 10 consecutive years. On June 21, the fund declared a quarterly dividend of $1.2716 per share, up from $0.3588 per share announced in March. Its dividend yield was recorded at 5.29% on August 8. SPDR S&P Global Dividend ETF (NYSE:WDIV)’s assets under management stood at $338.4 million and the fund has a total of 94 holdings in its portfolio.
Unum Group (NYSE:UNM) is one of the major holdings of SPDR S&P Global Dividend ETF (NYSE:WDIV), representing 1.44% of its portfolio. The insurance company has raised its dividends consistently for the past 13 years and has a 10-year dividend CAGR of 11.5%. It pays a quarterly dividend of $0.33 per share, with a yield of 3.58%, as of August 9.
At the end of Q1 2022, Two Sigma Advisors was the largest stakeholder of Unum Group (NYSE:UNM), owning a stake worth over $63.2 million. Overall, 30 hedge funds in Insider Monkey owned a collective stake of $323.5 million in the company.
3. VictoryShares US Small Cap High Div Volatility Wtd ETF (NASDAQ:CSB)
VictoryShares US Small Cap High Div Volatility Wtd ETF (NASDAQ:CSB) offers exposure to small-cap dividend-yielding stocks in the US. The fund’s net assets amounted to over $307 million and its net expense ratio stood at 0.35%. It has a total of 100 dividend stocks in its portfolio with an average market cap of $1.5 billion. The fund’s top 10 holdings represent 16.23% of its portfolio.
Universal Corporation (NYSE:UVV) is one of the prominent holdings of VictoryShares US Small Cap High Div Volatility Wtd ETF (NASDAQ:CSB), making up 1.75% of its portfolio. The leaf tobacco company has raised its dividends for 52 years in a row. It pays a quarterly dividend of $0.79 per share, with a dividend yield of 6.14%, as recorded on August 9.
At the end of Q1 2022, 10 hedge funds tracked by Insider Monkey owned stakes in Universal Corporation (NYSE:UVV), down from 7 in the previous quarter. The stakes owned by hedge funds hold a collective value of over $85.6 million. Pzena Investment Management was the company’s leading stakeholder in Q1, owning stakes worth over $51.7 million.
2. Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD)
Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD) tracks the performance of the S&P 500 companies that have provided high dividend yields and low volatility historically. The fund reinvests 90% of its total assets in common stocks in the index. The ETF has 51 holdings in its portfolio with an average market cap of $75.5 million. Since the start of the year, Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD) delivered a 2.22% return to shareholders, while the fund gained 7.54% in the last year, as of the market close of August 8.
An American multinational telecommunications company, AT&T Inc. (NYSE:T) is one of the fund’s most prominent holdings, accounting for 2.88% of its portfolio. The company pays a quarterly dividend of $0.2775 per share and has a yield of 6.14%, as of August 9. It has been raising its dividends consistently for the past 23 years, becoming one of the top choices of income investors.
At the end of Q1 2022, 74 hedge funds in Insider Monkey’s database owned stakes in AT&T Inc. (NYSE:T), up from 70 in the previous quarter. The stakes hold a combined value of over $4 billion.
Weitz Investment Management mentioned AT&T Inc. (NYSE:T) in its Q4 2021 investor letter. Here is what the firm has to say:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”
1. iShares Core High Dividend ETF (NYSE:HDV)
iShares Core High Dividend ETF (NYSE:HDV) provides exposure to relatively high dividend-paying US equities. The fund focuses on the financial health of the respective companies to provide regular income to investors. As of July 31, the fund’s 1-year returns came in at 10.2% while it gained 7.17% in the last three years.
iShares Core High Dividend ETF (NYSE:HDV) was founded in 2011 and the fund’s total assets amount to over $12.3 billion. It has 75 holdings in its portfolio and its 12-month trailing yield stood at 3.14%, as of June 30. HDV invested in a wide range of sectors, with healthcare, energy, and consumer staples dominating its portfolio.
Some of the major holdings of iShares Core High Dividend ETF (NYSE:HDV) are Exxon Mobil Corporation (NYSE:XOM), AbbVie Inc. (NYSE:ABBV), and Johnson & Johnson (NYSE:JNJ), which are also famous among elite funds in Q1 2022.
You can also take a look at 10 Dividend ETFs for 2022 and 10 Dividend ETFs to Buy Now
Follow Insider Monkey on Twitter
Suggested articles:
- 10 Best Battery ETFs to Buy Now
- 10 Best Shipping Stocks that Pay Dividends
- 10 Best REIT ETFs to Buy Now
Disclosure. None. 10 Dividend ETFs to Buy in August is originally published on Insider Monkey.
