This High-Yield ETF Has Increased Payouts 11 Years Straight, and It's Still Undervalued

Core Insights - Consistent dividend growth is a primary goal for income investors, and while ETFs may not always provide predictable income due to their trading activities, some can still deliver solid performance [1][2] - The iShares Core Dividend Growth ETF (DGRO) has successfully increased its annual dividend payout every year since its inception in 2014, distinguishing itself from many other dividend ETFs [2][6] ETF Overview - The iShares Core Dividend Growth ETF tracks the Morningstar U.S. Dividend Growth Index, focusing on dividend-paying stocks that meet three main criteria: must pay a qualified dividend, have five or more years of consecutive dividend growth, and maintain a payout ratio of less than 75% [4][7] - This strategy ensures investment in companies committed to paying and increasing dividends, while also screening out less reliable firms [4] Portfolio Composition - The ETF's portfolio includes durable and successful companies with strong cash flows and steady earnings, with top holdings such as ExxonMobil, JPMorgan Chase, Johnson & Johnson, Microsoft, and Apple [5] - The fund is overweight in key sectors like financials and healthcare, which provide growth catalysts and solid value [6] Performance Metrics - The iShares Core Dividend Growth ETF has an expense ratio of 0.08%, one of the lowest in its category, and a current yield of 2.14%, which is more than double that of the S&P 500 [8] - The ETF has demonstrated over a decade of dividend growth, with payouts increasing at a healthy rate [9]