|By PR Newswire||
|January 23, 2013 09:31 AM EST||
CHICAGO, Jan. 23, 2013 /PRNewswire/ -- Today, Zacks Investment Ideas feature highlights Features: Vanguard Dividend Appreciation ETF (AMEX:VIG), SPDR S&P Dividend ETF (AMEX:SDY), PowerShares S&P 500 High Dividend Portfolio (AMEX:SPHD) and EGShares Low Volatility EM Dividend ETF (AMEX:HILO).
4 Excellent Dividend ETFs
2012 was not a great year for the dividend ETFs as many investors avoided them in the last quarter of the year due to risk of a huge increase in taxes. Fortunately, the agreement on dividend taxes was more favorable than expected and thus the dividend ETFs should regain their appeal and popularity this year.
Dividend taxes for top-bracket taxpayers will rise from 15% to 20% (plus an additional 3.8% surcharge for Obamacare) while the taxes for those in the lower tax brackets would remain at the current levels. (Read: Three Great ETFs to Buy This Earnings Season)
Per S&P Dow Jones, companies in the S&P 500 index paid out regular cash dividends of $281 billion in 2012—17% higher than 2011 and 13% more than the previous record in 2008—without counting all the dividends that companies might have paid in January but paid in 2012 in order to avoid higher taxes in 2013. S&P expects 2013 to be another record year for dividend payments, after the cliff resolution.
Most large US corporations are sitting on large cash piles and are in a position to increase payouts to the shareholders. Further, there would be no difference between tax rates on long-term capital gains and dividends. In case the dividend taxes had increased more than the taxes on capital gains, many companies would have increased share buybacks and reduced dividend payouts. (Read:Best ETF Strategies for 2013)
Also, dividend stocks and ETFs are much better options for yield-hungry investors in this environment of ultra-low rates. Many investors continued to seek refuge in so called "safe-haven" assets last year as the markets stayed volatile due to uncertain situation in Europe, slowing growth in the emerging markets and fiscal cliff in the US. Further as the Fed continued its massive asset purchases, Treasury yields plunged to new lows.
However the situation is likely to change this year. Federal Reserve may slow-down or end its bond purchases in 2013 and the interest rates may start going up. At current yield levels the losses will be very high when the rates go up and thus it would be best for the individual investors to stay away from Treasury bonds now. (Read: Time to Exit Treasury Bond ETFs)
At the same time, since most dividend paying companies are stable, mature companies, these investments also provide greater stability and safety in a volatile environment—and the markets are expected to experience higher volatility if the debt ceiling negotiations turn ugly or if the Euro-zone situation worsens.
We prefer the ETFs that invest in stable, cash rich, low-risk companies that have solid growth potential, compared with the ETFs that focus just on the yield. Below we present four such ETFs that provide a stable stream of income to the investors and provide stability to the portfolio. (Read:Which Volatility Hedged ETF should you consider?)
Vanguard Dividend Appreciation ETF (AMEX:VIG)
VIG follows the Dividend Achievers Select Index, which is composed of common stocks of high quality companies that have a record of increasing dividends for at least 10 years. Launched in April 2006, the fund is now the largest dividend ETF, with $12.7 billion in AUM.
The fund is currently home to 133 securities, with a median market cap of about $40 billion. Wal-Mart, Coke and P&G are top three holdings while the top ten largest holdings account for 37.5% of the assets. The ETF is heavily weighted towards Consumer Discretionary (15%), Consumer Staples (24%) and Energy (10%) sectors.
With an expense ratio of 0.13%, this is one of the cheapest funds in this space. The dividend yield at 2.26% is just slightly above average S&P dividend yield, but this fund is better suited for investors who seek long-term capital appreciation along with income and not just high current yield. The fund has a beta of 0.82 vs. S&P 500.
SPDR S&P Dividend ETF (AMEX:SDY)
Launched in November 2005, this fund is based on the S&P High Yield Dividend Aristocrats Index which is designed to track the performance of highest dividend yielding companies within S&P Composite 1500 Index companies which have been consistently increasing their dividends every year for at least 20 years.
In terms of sector exposure, the fund focuses on Consumer staples (21%), Industrials (16%) and Financials (15%). The fund holds 83 securities and is very well diversified with the top holding accounting for just 2.9% of total assets.
With an expense ratio of 35 basis points, this fund is more expensive than VIG but has an attractive yield of 3.13% currently.
PowerShares S&P 500 High Dividend Portfolio (AMEX:SPHD)
SPHD intends to combine two most desirable investment themes—high dividend and low volatility, which almost guarantees the long-term success of this ETF. The index is composed of 50 stocks that historically have provided high dividend yields and exhibited low volatility.
The ETF is heavily weighted towards Consumer Staples (17%), Financials (14%) and Telecom (10%) sectors.
Launched in October last year, the fund has attracted more than $41 million in assets so far. It charges an expense ratio of 30 basis points and currently has an excellent distribution yield of 4.27%.
EGShares Low Volatility EM Dividend ETF (AMEX:HILO)
HILO is an ideal option for investors seeking to benefit from high dividend yield and high growth potential of the emerging market companies while trying to avoid excess volatility associated with some such companies.
HILO tracks INDXX Emerging Market High Income Low Beta Index, designed to provide high income and to be significantly less volatile through the utilization of low beta stocks. The index has a beta of 0.94 vs. MSCI EAFE Index. Further, the Index limits concentration in any position to 5% and country exposure to a maximum of 5 positions.
South Africa (21.4%), Turkey (16.1%) and India (11.4%) occupy the top spots in terms of country exposure. The fund holds 30 securities with an average market cap of about $14 billion. The ETF is tilted towards Financials (21%), Consumer Goods (18%) and Telecom (17%) sectors. The fund has an expense ratio of 85 basis points and yields 4.96% currently.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms. It monitors more than 200,000 earnings estimates, looking for changes.
Then when changes are discovered, they're applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock picking system; the Zacks Rank, continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter Profit from the Pros. In short, it's your steady flow of profitable ideas GUARANTEED to be worth your time. Get your free subscription to Profit from the Pros at: http://at.zacks.com/?id=7298
Follow us on Twitter: http://twitter.com/ZacksResearch
Join us on Facebook: http://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
SOURCE Zacks Investment Research, Inc.
Cloud Expo, Inc. has announced today that Andi Mann returns to 'DevOps at Cloud Expo 2016' as Conference Chair The @DevOpsSummit at Cloud Expo will take place on November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. "DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited t...
Jul. 1, 2016 12:00 AM EDT Reads: 522
IoT offers a value of almost $4 trillion to the manufacturing industry through platforms that can improve margins, optimize operations & drive high performance work teams. By using IoT technologies as a foundation, manufacturing customers are integrating worker safety with manufacturing systems, driving deep collaboration and utilizing analytics to exponentially increased per-unit margins. However, as Benoit Lheureux, the VP for Research at Gartner points out, “IoT project implementers often ...
Jun. 30, 2016 07:30 PM EDT Reads: 689
"We work in the area of Big Data analytics and Big Data analytics is a very crowded space - you have Hadoop, ETL, warehousing, visualization and there's a lot of effort trying to get these tools to talk to each other," explained Mukund Deshpande, head of the Analytics practice at Accelerite, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jun. 30, 2016 07:00 PM EDT Reads: 616
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
Jun. 30, 2016 04:00 PM EDT Reads: 1,013
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, provided an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profession...
Jun. 30, 2016 04:00 PM EDT Reads: 450
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Jun. 30, 2016 03:00 PM EDT Reads: 1,275
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
Jun. 30, 2016 02:45 PM EDT Reads: 335
When people aren’t talking about VMs and containers, they’re talking about serverless architecture. Serverless is about no maintenance. It means you are not worried about low-level infrastructural and operational details. An event-driven serverless platform is a great use case for IoT. In his session at @ThingsExpo, Animesh Singh, an STSM and Lead for IBM Cloud Platform and Infrastructure, will detail how to build a distributed serverless, polyglot, microservices framework using open source tec...
Jun. 30, 2016 02:00 PM EDT Reads: 692
Connected devices and the industrial internet are growing exponentially every year with Cisco expecting 50 billion devices to be in operation by 2020. In this period of growth, location-based insights are becoming invaluable to many businesses as they adopt new connected technologies. Knowing when and where these devices connect from is critical for a number of scenarios in supply chain management, disaster management, emergency response, M2M, location marketing and more. In his session at @Th...
Jun. 30, 2016 01:30 PM EDT Reads: 1,359
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Jun. 30, 2016 01:00 PM EDT Reads: 1,520
"delaPlex is a software development company. We do team-based outsourcing development," explained Mark Rivers, COO and Co-founder of delaPlex Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jun. 30, 2016 11:45 AM EDT Reads: 618
IoT is rapidly changing the way enterprises are using data to improve business decision-making. In order to derive business value, organizations must unlock insights from the data gathered and then act on these. In their session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, and Peter Shashkin, Head of Development Department at EastBanc Technologies, discussed how one organization leveraged IoT, cloud technology and data analysis to improve customer experiences and effi...
Jun. 30, 2016 11:30 AM EDT Reads: 648
Basho Technologies has announced the latest release of Basho Riak TS, version 1.3. Riak TS is an enterprise-grade NoSQL database optimized for Internet of Things (IoT). The open source version enables developers to download the software for free and use it in production as well as make contributions to the code and develop applications around Riak TS. Enhancements to Riak TS make it quick, easy and cost-effective to spin up an instance to test new ideas and build IoT applications. In addition to...
Jun. 30, 2016 11:15 AM EDT Reads: 738
The idea of comparing data in motion (at the sensor level) to data at rest (in a Big Data server warehouse) with predictive analytics in the cloud is very appealing to the industrial IoT sector. The problem Big Data vendors have, however, is access to that data in motion at the sensor location. In his session at @ThingsExpo, Scott Allen, CMO of FreeWave, discussed how as IoT is increasingly adopted by industrial markets, there is going to be an increased demand for sensor data from the outermos...
Jun. 30, 2016 11:00 AM EDT Reads: 475
CenturyLink has announced that application server solutions from GENBAND are now available as part of CenturyLink’s Networx contracts. The General Services Administration (GSA)’s Networx program includes the largest telecommunications contract vehicles ever awarded by the federal government. CenturyLink recently secured an extension through spring 2020 of its offerings available to federal government agencies via GSA’s Networx Universal and Enterprise contracts. GENBAND’s EXPERiUS™ Application...
Jun. 30, 2016 11:00 AM EDT Reads: 496
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
Jun. 30, 2016 11:00 AM EDT Reads: 1,116
Presidio has received the 2015 EMC Partner Services Quality Award from EMC Corporation for achieving outstanding service excellence and customer satisfaction as measured by the EMC Partner Services Quality (PSQ) program. Presidio was also honored as the 2015 EMC Americas Marketing Excellence Partner of the Year and 2015 Mid-Market East Partner of the Year. The EMC PSQ program is a project-specific survey program designed for partners with Service Partner designations to solicit customer feedbac...
Jun. 30, 2016 10:45 AM EDT Reads: 701
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discussed how businesses can gain an edge over competitors by empowering consumers to take control through IoT. He cited examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He also highlighted how IoT can revitalize and restore outdated business models, making them profitable ...
Jun. 30, 2016 10:30 AM EDT Reads: 590
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
Jun. 30, 2016 10:15 AM EDT Reads: 995
SYS-CON Events has announced today that Roger Strukhoff has been named conference chair of Cloud Expo and @ThingsExpo 2016 Silicon Valley. The 19th Cloud Expo and 6th @ThingsExpo will take place on November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. "The Internet of Things brings trillions of dollars of opportunity to developers and enterprise IT, no matter how you measure it," stated Roger Strukhoff. "More importantly, it leverages the power of devices and the Interne...
Jun. 30, 2016 10:00 AM EDT Reads: 575