DIVO: Great Alternative Dividend ETF To SCHD

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Amplify's Enhanced Dividend ETF offers a higher dividend yield compared to alternatives like SCHD and VIG.DIVO focuses on large cap growth and value stocks with a history of growing dividends. The ...

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The ...</p>\n\n<a href=\"https://seekingalpha.com/article/4680982-divo-great-alternative-dividend-etf-to-schd\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>DIVO: Great Alternative Dividend ETF To SCHD</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nDIVO: Great Alternative Dividend ETF To SCHD\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-03-29 20:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4680982-divo-great-alternative-dividend-etf-to-schd><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Amplify's Enhanced Dividend ETF offers a higher dividend yield compared to alternatives like SCHD and VIG.DIVO focuses on large cap growth and value stocks with a history of growing dividends. The ...</p>\n\n<a href=\"https://seekingalpha.com/article/4680982-divo-great-alternative-dividend-etf-to-schd\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"MSFT","symbol_name":"微软","start_time":0,"source_url":"https://seekingalpha.com/article/4680982-divo-great-alternative-dividend-etf-to-schd","article_id":"2423466536","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1542439856/image_1542439856.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2423466536","pubTimestamp":1711715400,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Amplify's Enhanced Dividend ETF offers a higher dividend yield compared to alternatives like SCHD and VIG.DIVO focuses on large cap growth and value stocks with a history of growing dividends. The fun","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"MSFT":"微软","SSO":"两倍做多标普500ETF","LU1670628061.USD":"M&G (LUX) NORTH AMERICAN DIVIDEND \"A\" (USD) INC","LU1363072403.SGD":"Fidelity Global Financial Services A-ACC-SGD","VTI.AU":"Visioneering Tech","LU0011850046.USD":"贝莱德全球长线股票 A2 USD","SCHD":"Schwab US Dividend Equity ETF","LU2505996509.AUD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4H\" (AUDHDG) INC","LU2505996681.GBP":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4H\" (GBPHDG) INC","MCD":"麦当劳","UPRO":"三倍做多标普500ETF","SPXU":"三倍做空标普500ETF","SPY.AU":"SPDR® S&P 500® ETF Trust",".SPX":"S&P 500 Index","SDS":"两倍做空标普500ETF","WMT":"沃尔玛","FDN":"First Trust Dow Jones Internet I","SH":"标普500反向ETF","VIG.AU":"VICTOR GROUP HOLDINGS LTD","VIG":"股利增长指数ETF-Vanguard","LU0097036916.USD":"贝莱德美国增长A2 USD","IVV":"标普500指数ETF","LU":"陆金所","OEX":"标普100","PG":"宝洁","SPY":"标普500ETF","OEF":"标普100指数ETF-iShares","V":"Visa","VTI":"大盘指数ETF-Vanguard MSCI","DIVO":"Amplify YieldShares CWP Dividend & Option Income ETF"},"translate_title":"迪沃：SCHD的另类股息ETF","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DIVO":1,"WMT":1,"VTI.AU":1,"VTI":1,"VIG.AU":1,"VIG":1,"V":1,"SPY.AU":1,"SPY":1,"SCHD":1,"PG":1,"MSFT":1,"MCD":1,"FDN":1,"US7Y.BOND":0.86,"US6M.BOND":0.86,"US5Y.BOND":0.86,"US3Y.BOND":0.86,"US30Y.BOND":0.86,"US2Y.BOND":0.86,"US12M.BOND":0.86,"US10Y.BOND":0.86,"US912797FS14.BOND":0.6,".SPX":0.6,"US912797GB79.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6,"US912797HG57.BOND":0.6,"US912797HH31.BOND":0.6,"LU":0.6,"IVV":0.6,"ESmain":0.6,"US912797FH58.BOND":0.6,"US912796CX52.BOND":0.6,"UPRO":0.6,"SSO":0.6,"SPXU":0.6,"SH":0.6,"SDS":0.6,"OEX":0.6,"OEF":0.6},"content_text":"Amplify's Enhanced Dividend ETF offers a higher dividend yield compared to alternatives like SCHD and VIG.DIVO focuses on large cap growth and value stocks with a history of growing dividends. The fund also uses an option strategy with covered calls.DIVO provides monthly dividend distributions, making it ideal for investors nearing or in retirement who rely on income.mohd izzuan Overview Dividend ETFs are always a great way to gain a portfolio of diverse holdings that prioritize dividend income. Amplify's Enhanced Dividend ETF (NYSEARCA:DIVO) offers a way to get a higher dividend yield than alternatives like Schwab's Dividend Equity ETF (SCHD) or Vanguard Dividend Appreciation ETF (VIG). Comparing the performance of all three of these funds, we can see the outperformance of DIVO and VIG compared to SCHD. Also, while the price of DIVO may not appreciate as much as VIG, the total return is nearly on par because of the higher distribution. Data by YCharts DIVO targets large cap growth stocks and value stocks within the S&P 500 Index range. The fund has a specific focus on dividend paying companies that have a history of growing their dividend. DIVO prioritizes providing income and has a secondary goal of capital appreciation. The strategy is that at least 80% of the fund's total assets are invested in dividend paying US based companies. What makes DIVO unique is that the fund also deploys an option strategy that uses covered calls. I previously covered DIVO back in September of 2023 and since then my outlook is further reinforced. I maintain my Buy rating as I believe price appreciation will continue and distributions have the potential to grow. DIVO serves as a great alternative for those who love what SCHD offers. DIVO's dividend distribution frequency is on a monthly basis which is more ideal for the investors that are nearing or at the retirement phase of their life and now depend on that income. Strategy & Holdings DIVO Fact Sheet Investing in DIVO means you get instant diversification across some of the best dividend paying companies in the world. We can see the top ten holdings includes companies like Microsoft (MSFT), Visa (V), McDonald's (MCD), and Procter & Gamble (PG). The list of holdings is diversified across most sectors with the majority of holdings falling within financials or technology. There are a total of 26 equity holdings in the portfolio. In comparison, SCHD's portfolio is mostly comprised of financials and healthcare while lacking a meaningful amount of exposure to growthier tech companies. As a result, DIVO has been able to capture more price upside YTD as several companies within the tech industry have seen exponential growth in a short period of time. A lot of the top holdings within have a great track record of contributing to price growth or dividend growth. For example:  Microsoft (MSFT): Reported 17% YoY revenue growth. JPMorgan (JPM): Recently raised the dividend 10%. Visa (V): Currently has a double digit dividend growth rate of 16%. Walmart (WMT): Increased the dividend for 50 consecutive years.  DIVO is also managed by experts that aim to consistently generate the option income needed to help supplement the current dividend yield. Since this is an actively managed fund, the expense ratio is 0.55%. This means for every $10,000 invested into DIVO, the fee would cost you about $55 in year 1. Part of the strategy is that the fund seeks to provide a total gross annual income of approximately 2 - 3% comprised of dividend income and an additional 2 - 4% from the option strategy that is deployed. The covered call aspect of the fund earns additional income through premiums on the options that are deployed. How it seems to work is that DIVO sells a call option which grants the holder the right to purchase the underlying equity at a predetermined price. The premium that's received from the option is where the income for the fund comes from. Managers of the fund identify opportunities to sell call option contracts when specific underlying stocks show strength. They also aim to identify opportunities to capitalize when there is increased volatility. The purpose here serves to optimize upside potential without completely limiting participation in bullish markets. Dividend & Comparison As a result of the inclusion of covered calls, the income received is not considered qualified dividends. This is a topic to take into account when choosing which dividend ETF you plan to go with. In fact, we can see how taxes on distribution chew into your overall return and lower your total return since inception from 11.29% down to 8.72%. In comparison, the dividends received from SCHD are classified as qualified dividend income. DIVO Prospectus The most recently declared monthly dividend of $0.1549 per share leaves the current dividend yield at 4.5%. DIVO's dividend can fluctuate month to month depending on the level of income captured from dividends and option income. Therefore, the dividend growth varies but overall the yield has remained between 4.5% - 5% since 2021. SCHD's current dividend yield is about 3.4% and paid out on a quarterly basis. SCHD has increased the dividend payout for 12 consecutive years. The historical performance between both DIVO and SCHD are almost on par when it comes to total return. It ultimately comes down to what math you prefer here; DIVO offers investors a higher level of dividend income due to the inclusion of an option strategy. If you are an investor that values income on a monthly basis, you are probably okay with the trade-off of a slightly lower total return since you are receiving a higher level of income. Data by YCharts Conversely, if you are still an accumulator you are likely to go with SCHD as the total return has been slightly superior due to a higher price growth. In addition, the dividend distribution frequency is on a quarterly basis in contrast to DIVO's monthly distribution. We can see how the price return of SCHD outperforms DIVO since 2017. Data by YCharts Lastly, SCHD offers a superior level of dividend growth. DIVO dividend has grown at a small CAGR (compound annual growth rate) of 1.12% over the last three year period. In comparison, SCHD's dividend has grown at a CAGR of 8.56% over the same three year period. Zooming out to a larger time horizon shows us that SCHD's dividend has grown at a CAGR of 10.87% over the last decade. The way I see the two funds is that SCHD offers the ability to compound your income over time and obtain a higher yield on cost over the next decade due to the continued dividend growth. If you do not need the income at the moment, SCHD may be a great choice. However, DIVO offers some instant gratification by delivering a larger dividend yield upfront. DIVO's monthly distributions are a great tool to use if you depend on the income from your investments to fund your lifestyle. The price you pay for that instant gratification is a higher cash flow that is not classified as qualified dividend income. Downside The downside here is that you are likely to underperform the greater indexes due to the limited price growth you'll experience. For example, we can see how DIVO and SCHD shapes up against Vanguard Total Stock Market ETF (VTI) and the S&P 500 (SPY). Although the total return for both dividend ETFs are impressive, they still lag behind a bit as the focus on distributions take away from the price appreciation. Data by YCharts If we witness a strong bull market, DIVO could be left behind due to the covered call nature of the fund. Once again though, this may not matter with those investors looking to capture consistent income. Another downside of DIVO is the potential tax consequence you'll suffer if you have a sizeable position. The distributions are generally considered ordinary income or capital gains depending on the activity within the portfolio. In comparison, a sizeable position that produces large streams of dividend income would be classified as qualified dividends from any of the alternatives funds mentioned here. SCHD, VTI, or SPY all would produce a lower stream of dividend income but there would be almost no tax consequences. Takeaway In conclusion, DIVO is a great alternative to SCHD as it offers a diverse portfolio of holdings across all industries. The dividend yield of 4.5% is higher than SCHD's dividend and the distributions are issued out on a monthly basis. DIVO is a great fund for those looking to prioritize income as the distributions are comprised of option income alongside dividends received. However, parts of the distributions are classified as ordinary income. The fund's returns are almost on par with SCHD but it seems that a bit of total return is sacrificed in exchange for the higher starting dividend yield.  Conversely, SCHD is a better choice for accumulators that don't necessarily need the dividend income at the moment. This is because the fund has historically captured more price upside since there isn't an option strategy that limits price upside. In addition, the dividend income received is more tax friendly.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2423466536"}