iShares Core Dividend ETF

DIVB

Market cap $1.32B

The iShares Core Dividend ETF blends dividend yields and buybacks, offering a conservative yet more growth-oriented alternative to pure income funds. DIVB trades at a 14.8x P/E, a 31% discount to the Russell 1000, with a 2.4% yield and double-digit dividend growth in key sectors. While underperforming the Russell 1000, DIVB has outperformed dividend peers over 3- and 5-year periods, aided by strong upside capture in bullish markets.

iShares Core Dividend ETF (DIVB) is rated a buy for its attractive valuation, focus on total shareholder yield, and lower tech concentration versus VTI. DIVB blends dividends and buybacks, offering a disciplined approach that avoids yield traps and provides downside protection through lower P/E and P/B ratios. The fund's sector allocation reduces tech concentration risk, increases exposure to financials, staples, and energy, and supports capital preservation in volatile markets.

Since its strategy change in December 2022, DIVB has delivered above-average dividends and total returns compared to competing large-cap value ETFs. It's also cheap, with an ER of just 0.05%. Its 2.85% estimated dividend yield is solid but certainly not in "high yield" territory, yet that's not what "core" dividend ETFs like DIVB attempt. Instead, it's all about balance. After covering DIVB's selection process, I'll highlight other dividend ETFs with above-average yields and total returns and compare their current fundamentals alongside DIVB's.

These dividend exchange-traded funds have all you can ask for. You can use the first one as a core holding and selectively pick out the satellites.

iShares Core High Dividend ETF (HDV) is downgraded to Hold due to underperformance driven by heavy energy and healthcare sector exposure. HDV's high dividend yield is offset by sluggish price momentum and weak earnings growth in key sectors, limiting its upside in tech-driven markets. iShares Core Dividend ETF (DIVB) is maintained as a Buy, offering strong capital appreciation, higher dividend growth, and better sector diversification.

DIVB offers broad exposure to high-quality, dividend-paying U.S. stocks, making it a solid core holding for income-focused investors. The ETF's low expense ratio and diversified portfolio provide cost-effective access to reliable dividend growers across sectors. Strong historical performance and a disciplined index methodology support DIVB's appeal for long-term, risk-averse investors seeking steady income.

I maintain a buy rating on iShares Core Dividend ETF due to its attractive valuation, strong dividend growth, and substantial increase in assets under management. DIVB's portfolio is heavily weighted towards large-cap value stocks, with significant exposure to Information Technology and Financials, offering a lower-beta, income-focused investment. The ETF's PEG ratio has improved, with a P/E of 14.8x and long-term EPS growth rate of 8.7%, making it reasonably valued.

DIVB: Dividend Increase Expected For This Well-Diversified Shareholder Yield ETF

iShares Core Dividend ETF offers a low expense ratio of 0.05% and a 12-month trailing yield of 2.7%, higher than the S&P 500's 1.2%. DIVB focuses on U.S. stocks with strong dividend and buyback programs, emphasizing large-cap value stocks, which provide stability and downside protection. The fund's significant exposure to the technology sector enhances long-term growth potential, with tech stocks expected to lead in EPS growth.

Index fund investors face lower yields in the S&P 500, with the 2025 implied dividend yield at 1.3%, down from over 1.5% last year. The iShares Core Dividend ETF offers a compelling alternative with a 2.56% yield, low fees, and a bullish technical trend. DIVB's portfolio focuses on large-cap value stocks, excluding growth stocks, and has a low 14.6x price-to-earnings ratio, enhancing its attractiveness.