Trade of the Day: Put Some of Your Eggs in Dividend Basket SDY

Advertisement

SPDR S&P Dividend ETF (SDY) — In times of elevated volatility, it is beneficial to have names on your buy list that you would like to own for stress relief, such as income stocks.

SDY invests at least 80% of its total assets in stocks that make up the S&P High Yield Dividend Aristocrats Index. This index is comprised of the highest-yielding components on the S&P Composite 1500 Index that have consistently increased their payouts every year for at least 20 consecutive years.

The fund’s top five holdings are: HCP, Inc. (HCP), AT&T Inc. (T), Consolidated Edison, Inc. (ED), National Retail Properties, Inc. (NNN) and Target Corporation (TGT).

Morningstar gives SDY a four-star rating. It has a one-year total return of 13.8%, a three-year return of 18.22%, and a five-year return of 15.55%. At the current price, its post-expense distribution yield is 2.27%, which includes a management fee of 0.35%.

Like all other ETFs and mutual funds, past performance is not a guarantee of future results, but the technicals look bullish.

The chart of SDY is similar to the chart of the S&P 500, except that it does not appear to be subject to the extremes of the senior index. Additionally, it has a very clear and narrower support zone, in which it has not yet closed.

Resistance is at its 50-day moving average at $79.50. The 200-day moving average provides support at $76.40, in the middle of the support zone at $75.50 to $77.

Buy SDY on a pullback to $76.50 as a long-term investment in a high-quality portfolio of dividend-paying stocks.

SDY Chart
Click to Enlarge

Chart Key


Article printed from InvestorPlace Media, https://investorplace.com/2015/01/spdr-sp-dividend-etf-sdy-trade-day/.

©2024 InvestorPlace Media, LLC