PEY: Dividend Growth Stocks With Double The Yield

Seeking AlphaETF AnalysisPEY: Dividend Growth Stocks With Double The YieldDec. 1, 2020 12:56 PM ET|| About: Invesco Exchange-Traded Fund Trust - Invesco High Yield Equity Dividend Achievers ETF (PEY), Includes: AZN, AZNCF, INPAP, IP, MRNA, NOBL, PFE, R, SPY, T, T.PA, T.PC, TBB, TBC, VZ, WYND, XOMby: Dave Dierking, CFADave Dierking, CFA ETF investing, portfolio strategy, Dividend Investing, retirementEtf Focus On The Street.Com.cls-1{fill:#024999;}SummaryUp until recently, dividend stock performance has been a mixed bag with high yielders being notable underachievers.
A COVID vaccine-inspired economic recovery in 2021 could put value stocks, dividend payers and cyclicals back into market leadership positions.
PEY is well-positioned in the themes that are poised to outperform over the next 12 months.
Requiring 10+ year dividend growth histories to qualify for the portfolio adds a degree of safety should the market turn sideways.
The current 4.5% dividend yield is well over double that of the S&P 500 and the Dividend Aristocrat universe.
Investment Thesis
Investing in the universe of Dividend Aristocrats remains one of the most popular income-producing strategies among investors. But they're usually not known for their high yields. The ProShares S&P 500 Dividend Aristocrats ETF (NOBL), perhaps one of the best benchmarks for this universe, yields just over 2%.
It doesn't have to be that way. The Invesco High Yield Equity Dividend Achievers ETF (PEY) provides exposure to long-term dividend growers and offers a yield of 4.6%, but it comes with some additional risks that investors should consider before jumping in.
Overview
In a market that has largely rewarded large-cap growth stocks up until recently, dividend ETF performance has been something of a mixed bag. As a whole, dividend stocks have underperformed the broader market, but there have been pockets of success.
Long-term dividend growers have generally achieved the best results. The... Read more