Using a Tool to Save Time

ETF Dividend Growth Detective

If you are a regular reader of my blog, you will know that there are certain tools I frequently use. One of the tools that is most helpful is Seeking Alpha. I have a paid subscription, as I find the value of the information far exceeds the cost of the subscription. Avoiding just one mistake can easily pay for the subscription tenfold. If you could get $5,000 of outstanding investing advice for $250, would you consider it? Of course, you would have to know how to use the tool that provides the $250 advice.

Seeking Dividend Growth

It sounds like gasoline prices have risen above $7.00 per gallon in parts of California. In Wisconsin we are quickly approaching $5.00 per gallon. When prices increase, you lose buying power. Although dividend growth investments are unlikely to keep up with the crazy inflation caused by Federal government policy decisions, you can have growing income in retirement. As most of you know, I focus on dividend growth.

Seeking Alpha ETF Screener

Using SA’s ETF screener, I found two ETFs that might be worthy of consideration. They are HDV and SPYD. Both are “High Dividend Yield” investments. However, don’t make the mistake of thinking that “high dividend” also means “dividend growth.” To illustrate the tool, I moved the sliders for “Market Cap”, “Dividend Yield”, “Expense Ratio”, and “Performance 1 Year” to suit my preferences. I prefer a decent yield and a low expense ratio. Also note that I am only looking at Large-Cap ETFs. The first image is the default result and the second one shows the 5-year performance. If an investment can provide 8-10% growth per year, I am usually interested.

NOBL Dividend Aristocrats

Another interesting dividend ETF is ProShares S&P 500 Dividend Aristocrats ETF.  I found this ETF using a faster search. In the Seeking Alpha search box I typed “Dividend Aristocrats.” The following image shows the dividend growth path for NOBL. This ETF has 65 holdings, but the top ten only make up about 18% of the total. This, I believe, makes it far less risky if one of the 65 gets hit with bad news.

NOBL Dividend Growth – always compare similar quarters.

VYM Dividend Growth

Yet another nice feature of Seeking Alpha is the ability to see “Dividend History.” You can also download dividend history for ease of analysis in a spreadsheet. For example, the first image is just the screen capture of the VYM dividend history. Notice that the second quarter dividend is normally announced in mid-June. The reason this is important is that the time between the dividend announcement and the Ex-Dividend date is just a couple of days. Therefore, if I want the next VYM dividend I should probably buy shares before June 10th.

VYM screen shot showing second quarter dividend announcement dates and Ex-Dividend dates.

The next image shows the results of a download from Seeking Alpha. I added the far-right column so that it is easy to see the annual growth of the dividend from 2017-2021.

VYM has a respectable dividend increase history based on good dividend growth stocks.

Summary of Costs for Detectives

I have friends who have paid their investment broker or adviser more than $5,000 per year for advice. Their advisor is probably doing less than 4 hours of work to earn the $5,000. Perhaps some investors should spend the $239 per year for a Seeking Alpha subscription. With Wisconsin state tax my total cost for the service is $252.15. I can get better advice from Seeking Alpha than most advisers can provide.

Full Disclosure

Cindie and I own 2,325 shares of VYM as a long-term investment.  We own 250 shares of SPYD. At the present time I do not have shares of NOBL or HDV.