3 ETFs That Could Benefit From Apple Dividend Growth
Look to smaller exchange-traded funds to benefit from Apple's dividend hike.
Following another disappointing earnings report, shares of Apple (NASDAQ:AAPL) traded in a wide range of nearly $23 Wednesday, but to the stock's credit, it closed with just a modest loss.
Perhaps investors are feeling more cheery knowing that Apple plans to return $100 billion to them by the end of 2015 in a plan that includes a 15 percent dividend increase.
Exxon Mobil (NYSE:XOM), the largest U.S. oil company, announced a 10.5 percent dividend increase Wednesday meaning the Dow (INDEXDJX:.DJI) component will pay $11.3 billion in indicated dividends, but even with that Apple's dividend hike means the iPad is the largest U.S. dividend-payer in cash terms.
ETF investors have a few options when it comes to getting a slice of Apple's higher dividend, but those options do not include some of the largest dividend ETFs. Funds such as the Vanguard Dividend Appreciation ETF (NYSEARCA:VIG) and the SPDR S&P Dividend ETF (NYSEARCA:SDY), fine ETFs in their own right, use length of dividend increase streaks as a primary screening criteria.
Since Apple is still new to the dividend increase game, the stock does not qualify for inclusion in VIG, SDY and related ETFs. A somewhat unheralded beneficiary of Apple's increased dividend could be the First Trust NASDAQ Technology Dividend Index Fund (NYSEARCA:TDIV). As was noted in March, Apple was about to be included in TDIV's underlying index, the NASDAQ Technology Dividend Index. At the close of trading on April 23, Apple accounted for 7.2 percent of TDIV's weight, making the stock the ETF's fifth-largest holding behind Intel (NASDAQ:INTC), Microsoft (NASDAQ: MSFT), Cisco Systems (NASDAQ:CSCO) and International Business Machines (NYSE:IBM). TDIV, which debuted in August, has nearly $89 million in assets under management.
Investors have a few other Apple dividend ETF options in addition to TDIV. In December, WisdomTree (NASDAQ:WETF) announced several of its popular dividend funds would include Apple in their lineups.
As of April 23, the $1.57 billion WisdomTree LargeCap Dividend Fund (NYSEARCA:DLN) had a 2.5 percent weight to Apple, making the stock ETF's sixth-largest holding just behind Pfizer (NYSE:PFE) and just ahead of Chevron (NYSE:CVX).
Apple is also the sixth-largest holding in the WisdomTree Total Dividend Fund (NYSEARCA:DTD) and the second-largest holding in the WisdomTree Total Earnings Fund (NYSEARCA:EXT), although EXT is not a pure dividend ETF.
Below, find some more great ETF and market content from Benzinga:
Here's Why Your Apple Options Trade Got Crushed Wednesday
ETFs to Watch April 25, 2013
Two ETFs For The Eagle Ford Shale And Permian Basin
Benzinga Pro covers this and all market news in real time. Get your free trial here.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter