Investors with concerns about the market have a reason to consider stocks known as dividend monarchs, a top strategy for Roundhill Investments. They recently introduced the S&P Dividend Monarchs ETF in November that focuses on companies that have consistently increased their dividends for a minimum of 50 years. According to David Mazza, Roundhill’s chief strategy officer, these companies have shown resilience through wars, recessions, and pandemics, rewarding shareholders with annual dividend increases.
The ETF’s top holdings as of November 9 were reported FactSet as 3M, Federal Realty Investment Trust, Leggett & Platt, Black Hills Corporation, and Stanley Black & Decker. Concerning its sector exposure, Mazza explained that the ETF had overweighted in consumer staples, industrials, and utilities, without any exposure to IT or communication services, making it a mix of traditionally defensive sectors.
Todd Rosenbluth of VettaFi also sees dividend monarchs as a safer investment, particularly as bond yields are decreasing and dividends become more appealing. He highlighted the benefits of dividend strategies in providing upside in the stock market with downside protection and stability.