Up to date on October 4th, 2024 by Bob Ciura
Spreadsheet up to date every day
The NASDAQ Dividend Achievers Index is made up of over 400 NASDAQ shares with 10+ consecutive years of dividend will increase, that additionally meet sure minimal dimension and liquidity necessities.
It is among the greatest sources to search out high-quality dividend development shares.
The downloadable Dividend Achievers Spreadsheet Checklist under comprises the next for every inventory within the index:
- Sector
- Dividend yield
- Identify and ticker
- Value-to-earnings ratio
You possibly can obtain your free Excel listing of all Dividend Achievers by clicking on the hyperlink under:
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Be aware: The Dividend Achievers listing is up to date utilizing the holdings from this Invesco ETF.
Use The Dividend Achievers Checklist To Discover High quality Dividend Progress Shares
The listing of all Dividend Achievers is efficacious as a result of it offers dividend development traders with an extended listing of shares which have elevated their dividends for a minimum of 10+ consecutive years.
These are corporations with shareholder-friendly administration groups dedicated to rewarding traders. They’ve a capability to take action due to sustained earnings development.
Collectively, these two standards kind a highly effective pair. They grow to be much more highly effective for the investor who buys high-quality dividend development shares when they’re undervalued.
The spreadsheet above permits you to kind by price-to-earnings ratio (or dividend yield) so you’ll be able to rapidly discover undervalued dividend paying companies with 10+ years of consecutive dividend will increase.
Right here’s learn how to use the Dividend Achievers listing to rapidly discover prime quality dividend development shares probably buying and selling at a reduction:
- Obtain the listing
- Kind by P/E ratio, lowest to highest
- Filter out shares yielding lower than 3%
- Analysis the highest shares additional to search out the most effective concepts
For these unfamiliar with Excel, right here’s learn how to filter out shares yielding lower than 3%:
Step 1: Click on on the dividend yield filter button:
Step 2: Go to ‘Quantity Filters’, after which click on on ‘Larger Than or Equal To’:
Step 3: Enter your required yield quantity (as a decimal), .03 within the instance above. Then press ‘OK’.
That’s it; the remaining shares will all have dividend yields above 3%.
Different Dividend Lists
The Dividend Achievers listing is just not the one approach to rapidly display for shares with lengthy histories of dividend development.
The Dividend Aristocrats Index is comprised of 68 shares with 25+ years of consecutive dividend will increase. It’s extra unique than the Dividend Achievers Index.
There’s a comparable group often known as the Dividend Champions, which even have raised their dividends for 25+ consecutive years. The Dividend Champions is a much bigger listing because it contains shares that don’t qualify as Dividend Aristocrats due to indexing or buying and selling quantity restrictions.
The Dividend Kings Checklist is much more unique. It’s comprised of 53 shares with 50+ years of consecutive dividend will increase.
Efficiency of the Dividend Achievers Index
Up to now 5 years, the most important ETF that tracks the Dividend Achievers, the Invesco Dividend Achievers ETF (PFM), generated 11.97% annualized whole returns. It has underperformed the comparable ETF that tracks the S&P 500 Index (SPY), in the identical interval.
SPY has generated annualized whole returns of 16.14% up to now 5 years. There are a pair causes for this.
First, the Dividend Aristocrats index is equally weighted, whereas the Dividend Achievers index is market cap weighted.
On the floor, this doesn’t sound prefer it issues a lot, but it surely has severe repercussions for returns.
Which means that bigger shares with increased market caps make up a better portion of the Dividend Achievers index. The highest 5 Dividend Achievers by weight are listed under (together with their weight):
- Microsoft Company (MSFT): 3.98%
- Apple Inc. (AAPL): 3.92%
- Broadcom (AVGO): 3.49%
- Walmart Inc. (WMT): 2.83%
- JP Morgan Chase (JPM): 2.54%
I’m not saying these massive holdings don’t make good dividend investments. Market cap has nearly no sway in figuring out the most effective Dividend Achievers.
The issue with market cap weighting is that it is the other of worth investing.
Think about {that a} shares’ price-to-earnings ratio rises from 10 to twenty whereas earnings don’t change. The corporate’s market cap would double.
In the true world, paying twice as a lot for a similar factor is just not a ‘whole lot’. With market cap weighting, the Dividend Achievers index would maintain double its funding within the enterprise that noticed its P/E ratio double.
Additionally, the Dividend Achievers index doesn’t improve possession in companies which have seen their market caps decline.
Which means that if a unique enterprise noticed its price-to-earnings ratio decline from 30 to fifteen (and earnings have been unchanged), the index would see its possession of this enterprise fall by 50%.
Market cap weighting buys excessive and sells low. Market cap weighting doesn’t benefit from valuation, whereas equal weighting does.
With equal weighting, if an organization’s price-to-earnings ratio falls by 50%, the fund should purchase extra to maintain weights equal.
Equally, an equal weighted fund should promote when the price-to-earnings ratio of a enterprise rises to maintain the fund equally weighted.
One other distinction between the 2 teams is dividend historical past. Whereas 10 years is a sizeable streak of consecutive dividend funds, it covers (at greatest) 1 financial cycle.
25 years of consecutive dividend will increase covers a number of financial cycles. Dividend Achievers wouldn’t have the identical stage of consistency as Dividend Aristocrats. Dividend historical past issues.
Ideas on Underperformance
SPY and PFM are each market cap weighted. PFM has the next expense ratio, however earlier than operating historic efficiency numbers I’d have anticipated PFM to outperform SPY.
Dividend shares have traditionally outperformed non-dividend paying shares. Shares with lengthy dividend histories (Dividend Aristocrats) have traditionally outperformed the market.
Why haven’t the Dividend Achievers outperformed? One motive might be that the valuation a number of of the broader SPY fund has expanded at a quicker price than for PFM.
The lack of the Dividend Achievers index to outperform the S&P 500 over a time period that has been comparatively favorable for dividend shares (because of falling rates of interest) is perplexing.
Regardless, there are higher dividend ETFs for fund traders to select from.
A Beginning Level
The Dividend Achievers listing is greatest used as a place to begin for locating high-quality dividend development shares.
Being on the listing in itself doesn’t robotically assure a person inventory has a sturdy aggressive benefit, or that it’s a good funding.
Lengthy-term traders ought to confirm that an funding has a powerful and sturdy aggressive benefit, a shareholder pleasant administration, and trades at an inexpensive (ideally low) valuation.
Combing the listing for these kind of companies can vastly pace up the search for prime quality shareholder pleasant companies buying and selling at truthful or higher costs.
Different Dividend Lists & Closing Ideas
The Dividend Achievers listing is just not the one approach to rapidly display for shares that often pay rising dividends..
Thanks for studying this text. Please ship any suggestions, corrections, or inquiries to [email protected].
