Pey Dividend Yield ETF Investment Analysis

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If you're considering investing in a Pey Dividend Yield ETF, it's essential to understand the underlying investment strategy. The fund focuses on dividend-paying stocks, which can provide a relatively stable source of income.

Dividend-paying stocks are often less volatile than growth stocks, making them a more attractive option for investors seeking stable returns. The Pey Dividend Yield ETF invests in a diversified portfolio of dividend-paying stocks, providing exposure to various sectors and industries.

Historically, dividend-paying stocks have outperformed the market during times of economic uncertainty, making them a valuable addition to a diversified investment portfolio.

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Investment Effectiveness

PEY's dividend yield is a notable 8.0%, significantly higher than the market average. This suggests that PEY is a strong contender for investors seeking high dividend yields.

Compared to the Canadian market, PEY's dividend yield is in the top 25%. This indicates that PEY is a high-dividend payer, even among its peers in the oil and gas industry. In fact, PEY's dividend yield is higher than 75% of the market.

Here's a comparison of PEY's dividend yield to the market:

Reconstitution for Market Slowdown Effectiveness

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PEY's lack of tech exposure makes it a defensive fund suitable for sideways or declining markets.

Invesco High Yield Equity Dividend Achievers, or PEY, is a solid choice for investors looking to weather market downturns.

Its top sectors are Utilities, which tend to perform well during times of economic uncertainty.

A 4.3% yield is a significant draw for investors seeking income during market slowdowns.

PEY's focus on dividend growth stocks provides a steady stream of income, even in declining markets.

Its 4% yield is higher than many other dividend growth ETFs, making it an attractive option for income-seeking investors.

PEY's diversified portfolio of 50 companies across all size segments helps to reduce risk and increase potential returns.

Its history of attracting significant assets under management, currently $1.4 billion, is a testament to its appeal among investors.

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JEPI vs.

Income investors are looking for ways to boost their returns, and high yield ETFs are a popular option. Both PEY and JEPI are designed to offer high yields, but they differ in their approach.

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Income ETFs like PEY and JEPI are in high demand due to rising interest rates. This demand is driven by investors seeking to capitalize on higher yields.

Investors often choose high yield ETFs like JEPI and PEY for their ability to provide regular income. By investing in these ETFs, investors can potentially earn higher returns than traditional savings accounts or bonds.

Rising interest rates have created a surge in demand for income-generating investments, such as high yield ETFs. This trend is likely to continue as long as interest rates remain high.

Why a 4% Yield May Not Be Worth It

A 4% yield may not be worth it, especially when you consider the expense ratio. PEY's expense ratio is 0.53%, which can eat into your returns over time.

The fund's monthly distributions can also become diluted, reducing the actual yield you receive. This is a potential drawback to consider when evaluating PEY.

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In comparison, other income ETFs may offer more competitive yields or lower expense ratios. For example, JEPI is another high-yield ETF that seeks to appeal to income investors.

Here's a brief comparison of PEY and JEPI:

Keep in mind that this table is not exhaustive, and there may be other factors to consider when choosing between these two ETFs.

U.S. ETF Choices

For U.S. ETF choices, VIG offers exposure to dividend-paying large-cap US companies that exhibit growth characteristics. This makes it a versatile option for investors.

SCHD, on the other hand, offers exposure to dividend-paying U.S. equities, making it a potentially useful tool for those seeking a dividend-focused portfolio.

U.S. ETF Choices

VIG offers exposure to dividend-paying large-cap US companies that exhibit growth characteristics.

There are various options to choose from, making it essential to consider your investment goals and risk tolerance.

VIG focuses on large-cap companies, which can provide stability and growth potential.

SCHD offers exposure to dividend-paying U.S. equities, making it a potentially useful tool for investors seeking income.

Investors should carefully evaluate their options and consider how they align with their overall investment strategy.

SCHD's focus on dividend-paying U.S. equities can be a valuable addition to a diversified portfolio.

Growth ETF

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Growth ETFs are a great choice for investors looking for long-term gains. They focus on stocks with high growth potential, often at the expense of current income.

Dividend growth stocks, for example, have a higher growth rate than high dividend stocks. This means they're more likely to increase in value over time.

The expected return of stocks can be broken down into three components: yield, growth, and change in valuation. Growth ETFs aim to maximize the growth component, which can lead to significant long-term gains.

Investors should consider their risk tolerance and investment horizon before choosing a Growth ETF. If you're willing to take on more risk, you may be rewarded with higher returns.

High growth stocks often come with higher volatility, so it's essential to be prepared for fluctuations in the market.

Good Yield, Cheap Valuations

The Invesco High Yield Equity Dividend Achievers ETF has a two-decade old history, making it one of the more established dividend yielding products.

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PEY has a good yield, which is likely attractive to investors looking for regular income.

The ETF has cheap valuations, which could be a major selling point for those who want to buy in.

This combination of good yield and cheap valuations makes PEY a potentially compelling option for investors.

However, it's worth noting that PEY's reliability is not entirely clear, as VYM appears to be more reliable.

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Income and Returns

PEY offers a 4.81% TTM yield with monthly payouts. This is a significant advantage for investors seeking regular income.

The fund's stock selection rules are based on yield and dividend increases, which helps to diversify its portfolio across 50 stocks. This diversification can help reduce risk and increase stability.

However, PEY's composition leads to poor total returns. This is an important consideration for investors who are looking for long-term growth in addition to income.

On a more positive note, PEY has consistently delivered a steady double-digit total return over a longer time horizon.

Expand your knowledge: Fixed Income Portfolio Analysis

Market Analysis

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PEY's dividend yield is significantly higher than the market average. At 8.0%, it's more than four times the dividend yield of the bottom 25% of dividend payers in the Canadian market.

The company's dividend yield is also higher than the industry average for oil and gas companies, which is 4.7%. This suggests that PEY is offering a more attractive return on investment compared to its peers.

Here's a comparison of PEY's dividend yield to the market average:

Market Downturn

Market downturns can be caused by factors like geopolitical tensions, central bank policies, and fluctuating jobless claims.

Investors may find it challenging to allocate their funds during market pullbacks, but some funds are designed to perform well in such situations.

PEY, a dividend growth ETF, is one such fund that can resist market downturns.

It has a 4% yield, making it attractive to investors seeking regular income.

PEY's heavy exposure to utilities, financials, and consumer staples sectors can help it weather market volatility.

These sectors are often less affected by market fluctuations, providing a stable foundation for the fund.

Investors may find it beneficial to consider PEY as a defensive fund, particularly in sideways or declining markets.

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Is Wall Street Too Bearish On This ETF?

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PEY, a dividend growth ETF, offers a 4% yield, which is a relatively attractive option in today's market.

Its heavy focus on utilities, financials, and consumer staples may be a sign of stability, but it's essential to consider the broader market trends.

The ETF tracks the NASDAQ US Dividend Achievers 50 Index, which selects high-dividend stocks from all size segments with at least ten consecutive years of dividend increases.

This ensures a consistent income stream for investors, but it also means that PEY may not be as volatile as other ETFs.

The Index dividend yield is 5%, which is higher than the ETF's 4% yield, indicating that there may be opportunities for growth.

PEY has attracted $1.4 billion in assets under management, demonstrating investor interest in this ETF.

Its high yield is virtually guaranteed by the 50 companies it holds, all of which have increased their dividends for ten consecutive years.

Distributions

PEY dividend yield offers a reliable income stream for investors, and one key aspect to consider is the distribution frequency. PEY distributes capital gains annually.

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The payment schedule is consistent, with no variation in frequency across different categories. This consistency is a positive factor for investors who rely on regular income from their investments.

PEY's earnings coverage is a strong 88.2%, which means its payments are well-covered by earnings. This indicates a healthy financial position for the company.

However, the cash payout ratio is a different story. At 125.5%, PEY's dividend payments are not well-covered by cash flows. This suggests that the company may need to borrow money to fund its dividend payments.

Here's a summary of the distribution schedule:

Company Evaluation

The dividend yield of Peyto Exploration & Development is 4.60%, which is a relatively high percentage compared to the category low of 0.00% and category high of 22.79%.

The company's dividend yield ranks 22.01% in its category, indicating that it is among the top performers in this regard.

Peyto Exploration & Development is a dividend paying company with a current yield of 7.97% that is well covered by earnings, according to the dividend criteria checks.

Concentration Analysis

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In a Concentration Analysis, we're looking at how concentrated a fund's portfolio is. The fund in question, PEY, has a net asset value of $1.29 billion.

A fund's concentration can be measured by its number of holdings. PEY has 53 holdings, which is a relatively small number compared to the category high of 2270 holdings.

To put this into perspective, the number of holdings for PEY is 81.94% of the category low of 8 holdings, indicating a relatively small portfolio.

The fund's net assets in its top 10 holdings are $371 million, which is 31.11% of the category low of $349,000.

Here's a comparison of PEY's concentration metrics:

These metrics give us a good idea of how concentrated PEY's portfolio is.

Criteria Checks

In evaluating a company, it's essential to check its dividend criteria. Peyto Exploration & Development passes this check with a current yield of 7.97%.

The company's dividend is well covered by its earnings, which is a good sign. This means that the dividend is sustainable and less likely to be cut.

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Peyto Exploration & Development's next dividend payment date is on 14th March, 2025, with an ex-dividend date of 28th February, 2025.

Here are the analysts covering Peyto Exploration & Development Corp.:

There are 28 analysts in total covering the company, with 3 of them submitting estimates used in our report. These submissions are updated throughout the day.

Discover Strong Companies

In the world of investing, it's essential to discover strong companies that can deliver solid returns.

Peyto Exploration & Development, for instance, boasts a high concentration of assets, with a net asset value of $1.29 billion.

Their portfolio is also well-diversified, with 53 holdings across various categories.

When evaluating a company's financial health, the number of holdings can be a crucial indicator of its stability.

Peyto Exploration & Development's 53 holdings put it in the 81.94% percentile for this metric, indicating a strong and diversified portfolio.

A company's ability to pay dividends is also a vital aspect of its financial health.

Peyto Exploration & Development is a dividend-paying company with a current yield of 7.97%, which is well-covered by its earnings.

Here's a breakdown of Peyto Exploration & Development's dividend criteria, which checks out favorably:

Frequently Asked Questions

What is the dividend yield of Pey?

The dividend yield of PEY is 4.43%. This relatively high yield suggests a potentially attractive investment opportunity for income-focused investors.

Forrest Schumm

Copy Editor

Forrest Schumm is a seasoned copy editor with a deep understanding of the financial sector, particularly in India. His expertise spans a variety of topics, including trade associations, banking institutions, and historical establishments. Forrest's work has shed light on the intricate landscape of Indian banking, from the Indian Banks' Association to the significant 1946 establishments that have shaped the industry.

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