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.
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.
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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.
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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.