VIGI: Blue Chip International Growth

seekingalpha04-24

Vanguard International Dividend Appreciation Index Fund is a blue-chip portfolio on non-US stocks.VIGI offers a potential total return upside of 13% on EPS growth of 8% valued at 17x PE or 2x PEG.VIGI...

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}\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\">\nVIGI: Blue Chip International Growth\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-24 21:42 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4685626-vigi-blue-chip-international-growth-international-dividend-appreciation-etf><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Vanguard International Dividend Appreciation Index Fund is a blue-chip portfolio on non-US stocks.VIGI offers a potential total return upside of 13% on EPS growth of 8% valued at 17x PE or 2x PEG.VIGI...</p>\n\n<a href=\"https://seekingalpha.com/article/4685626-vigi-blue-chip-international-growth-international-dividend-appreciation-etf\">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":"SPY.AU","symbol_name":"SPDR® S&P 500® ETF Trust","start_time":0,"source_url":"https://seekingalpha.com/article/4685626-vigi-blue-chip-international-growth-international-dividend-appreciation-etf","article_id":"2429593264","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1263489903/image_1263489903.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2429593264","pubTimestamp":1713966129,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Vanguard International Dividend Appreciation Index Fund is a blue-chip portfolio on non-US stocks.VIGI offers a potential total return upside of 13% on EPS growth of 8% valued at 17x PE or 2x PEG.VIGI","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"SPY.AU":"SPDR® S&P 500® ETF Trust","IE00BMG7P819.SGD":"Legg Mason ClearBridge - Global Infrastructure Income A Mdis SGD-H Plus","IE00BMG7P926.USD":"Legg Mason ClearBridge - Global Infrastructure Income A Acc USD","SPY":"标普500ETF","IE00BMG7P694.USD":"Legg Mason ClearBridge - Global Infrastructure Income A Mdis USD Plus","BK4023":"应用软件","OEF":"标普100指数ETF-iShares","BK4528":"SaaS概念","SAP":"SAP SE","BK4532":"文艺复兴科技持仓","IE00BD4GTW91.USD":"LEGG MASON CLEARBRIDGEINFRASTRUCTURE VALUE \"A\" (USDHDG) INC","IVV":"标普500指数ETF","BK4162":"人寿与健康保险","NVO.AU":"NOVO RESOURCES CORP-CDI","NVO":"诺和诺德","BK4534":"瑞士信贷持仓","BK4139":"生物科技","FDN":"First Trust Dow Jones Internet I","AAGIY":"友邦保险ADR","SDS":"两倍做空标普500ETF","VIGI":"Vanguard International Dividend Appreciation ETF","IE00BD4GTV84.USD":"LEGG MASON CLEARBRIDGEINFRASTRUCTURE VALUE \"A\" (USDHDG) ACC","BK4588":"碎股","BK4007":"制药","IE00BMG7P587.USD":"LEGG MASON CLEARBRIDGE GLOBAL INFRASTRUCTURE INCOM \"A\" (USD) INC","UPRO":"三倍做多标普500ETF","BK4559":"巴菲特持仓","CSLLY":"CSL Ltd.","OEX":"标普100",".SPX":"S&P 500 Index","BK4550":"红杉资本持仓","BK4585":"ETF&股票定投概念","BK4208":"复合型公用事业","IE00BD4GTT62.SGD":"Legg Mason ClearBridge Infrastructure Value A SGD-H (mdis) plus","BK7104":"黄金","SSO":"两倍做多标普500ETF","SH":"标普500反向ETF","BK4581":"高盛持仓","PEG":"公务集团","BK4504":"桥水持仓","SPXU":"三倍做空标普500ETF"},"translate_title":"VIGI：蓝筹股国际增长","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AAGIY":1,"VIGI":1,"SPY.AU":1,"SPY":1,"SAP":1,"PEG":1,"NVO.AU":1,"NVO":1,"CSLLY":1,"FDN":0.9,"SDS":0.6,"IVV":0.6,"OEF":0.6,"OEX":0.6,"SH":0.6,"SPXU":0.6,"SSO":0.6,"UPRO":0.6,".SPX":0.6,"ESmain":0.6},"content_text":"Vanguard International Dividend Appreciation Index Fund is a blue-chip portfolio on non-US stocks.VIGI offers a potential total return upside of 13% on EPS growth of 8% valued at 17x PE or 2x PEG.VIGI tracks the S&P Non-US Dividend Growers Index, which requires 7 years of consecutive dividend increases that provide broad diversification across sectors and countries.The dividend appreciation strategy is a key filter in identifying consistent growth stocks at reasonable prices.Natakorn Ruangrit/iStock via Getty Images Summary With the large-cap US market close to fair valuation, many investors may be looking to other developed or emerging markets for value and opportunity. Europe has its own magnificent seven, albeit with a far less technology focus and Japan is experiencing a renaissance while India continues to be the fastest growth market and China is still a big question mark. I analyzed the Vanguard International Dividend Appreciation Index Fund (NASDAQ:VIGI) to gauge its return potential. The outcome was relatively positive with a total return upside of 13% on EPS growth of 8% valued at 17x PE or 2x PEG to YE24. It is evident that this ETF is not designed to provide current income, and instead the dividend appreciation strategy is a key filter in identifying consistent growth stocks at reasonable prices. The second positive factor is diversification in non-US stocks that may be driven by varying macro drives out of sync with the US market. Past Performance VIGI has a short track record, dating back to 2016. I compared its performance to a few peers, ETFs that have a dividend strategy with international or non-US large caps, as well as the SPDR S&P 500 ETF (SPY). Below are three charts with price and total return (price plus dividends) and just dividends. As can be seen, VIGI has modestly outperformed most peers on capital appreciation, more so than from dividends. Created by author with data from Capital IQ Stock Selection Methodology VIGI tracks the S&P Non-US Dividend Growers Index, which has several filters. First, the companies need to have 7 consecutive years of increasing dividends, share buybacks or extraordinary dividends are not included. Second, the companies with the highest dividend yields are selected, of which the top 25% the highest yields are excluded. Then this is market cap weighted with a max 4% position. The index methodology does not have valuation or growth criteria, although the elimination of the top 25% the highest yields is designed to weed out low valuation stock, i.e., value traps. S&P Global Portfolio Overview & Upside Potential This ETF has 385 holdings with broad diversification across sectors and countries and provides investors with a blue-chip portfolio of mostly developed world non-US stocks. Novo Nordisk (NVO) is currently the largest weight at 6% followed by SAP (SAP) at 4.6% both may see a reduction in future rebalancing. AIA Group Limited (OTCPK:AAGIY) a Hong Kong-based life insurance company has the highest upside at over 100%, according to the consensus. I gathered consensus data on 49 stocks that represent 75% of AUM, which provides a high statistical database to analyze. Using consensus price targets and dividends, I calculated a potential total return of 13% for the portfolio, which consists of 11% in capital gains and 2% in dividend income. It is evident that this ETF is not designed to provide current income, and instead the dividend appreciation strategy is a key filter in identifying consistent growth stocks at reasonable prices. VIGI Consensus Price Target (Created by author with data from Capital IQ) Revenue & Net Margin Analysis The portfolio has a mature revenue growth rate of 5% and modestly expanding margins from 14.6% to 15.3%. Given the broad sector diversification, it is unwise to draw conclusions as to the multitude of revenue or margin drivers. However, Novo is a clear contributor, with over 20% top-line growth estimated through 2025 on its weight loss drugs. Consensus Revenue & Net Margin (Created by author with data from Capital IQ) EPS Growth Using consensus data I calculated that the portfolio has over 8% EPS growth in the YE24-25 period with a clear acceleration from the YE24 of 7% to over 11% in YE25. While these are not tech-like AI-driven EPS growth levels they are still quite good given the blue-chip and mature company nature of the portfolio. The ETF and the Index it tracks are designed to identify consistent growth via the 7-year divided growth filter. Novo continues to stand out with its 24% EPS growth flowed by CSL (OTCQX:CSLLY) an Australian-based pharmaceutical with 16% EPS growth. SAP, according to consensus, may have a weak 2024 before seeing a strong rebound in 2025. Consensus EPS Growth (Created by author with data from Capital IQ) Valuation Everything has a price, and even an 8% EPS growth rate can drive upside if the stocks have not yet priced this in. The ETF is trading at under 17x PE, which is cheaper than the S&P 500 at 20x and 9% potential upside. However, on a relative basis, when I compare PE to EPS growth (PEG) that ratio is higher at 2x PEG vs. the SPX at 1.5x. Perhaps the main caveat may be that across the world, risk-free rates (Central Bank vs. Fed) are lower or have already begun an easing cycle that makes equities increasingly more attractive than fixed income. One should remember that this is a non-US portfolio that has domestic demand or investment flow that may not align with what is occurring in the US market. Consensus Valuation (Created by author with data from Capital IQ) Conclusion  I rate VIGI a buy. The ETF is a high-quality portfolio of non-US stocks that have shown consistent cash flow and earnings growth and offer investors broad diversification across sectors and countries at a reasonable valuation. The easing cycle has or is likely to start sooner across the globe vs. the US, and this ETF may capture this shift while maintaining a high degree of quality companies.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"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":"4.29.1","shortVersion":"4.29.1","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/2429593264"}