Dividend ETFs provide a convenient way to invest in dividend-paying stocks, offering diversification and potentially lower risk compared to individual stock picking. By leveraging the TipRanks ETF Screener to scan for dividend ETFs with more than 10% upside potential projected by analysts, we have shortlisted two funds: DES and SCHD.
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Let’s take a deeper look at these two ETFs.
WisdomTree U.S. SmallCap Dividend Fund (DES)
The DES ETF provides exposure to small-cap dividend-paying stocks and tracks the performance of the WisdomTree U.S. SmallCap Dividend Index. The ETF has $1.89 billion in assets under management (AUM), with the top 10 holdings contributing 8.2% of the portfolio. Importantly, it has an expense ratio of 0.38%. The DES ETF has returned 6.5% in the past six months.
Overall, the DES ETF has a Moderate Buy consensus rating. Of the 596 stocks held, 308 have Buys, 252 have a Hold, and 36 have a Sell rating. The analysts’ average price target on the DES ETF of $35.39 implies a 12.53% upside potential from the current levels.
Schwab US Dividend Equity ETF (SCHD)
The ETF seeks to track the performance of the Dow Jones U.S. Dividend 100 Index and invests at least 90% of its total assets in securities of U.S. companies that have a record of consistently paying dividends. The ETF has $54.48 billion in AUM, with the top 10 holdings contributing 41.45% of the portfolio. Meanwhile, the low expense ratio of 0.06% is encouraging. Interestingly, the SCHD ETF has generated a return of 7.4% over the past six months.
On TipRanks, SCHD has a Moderate Buy consensus rating. This is based on the consensus rating of each stock held in the portfolio. Of the 101 stocks held, 48 have Buys, 47 have a Hold rating, and six have a Sell rating. The analysts’ average price target on the SCHD ETF of $85.69 implies a 11.1% upside potential from the current levels.
Concluding Thoughts
Overall, ETFs are a low-cost, diversified, and transparent way to participate in the market. Investors looking for exposure to dividend-paying ETFs could consider taking a look at DES and SCHD due to the upside potential expected by analysts.