Pacer Global Cash Cows Dividend ETF

GCOW

Market cap $2.61B

A basket of dividend ETFs can provide a lifetime of passive income and low stress. The first five ETFs offer outsize yields from a combination of stocks, real estate, and bonds.

These ETFs use different strategies to select high-yield dividend stocks. They should provide investors with a steadily rising income stream.

Pacer Global Cash Cow Dividend ETF targets companies with high free cash flow and dividend yields, aiming for income and capital appreciation. GCOW offers a 4.15% dividend yield and 7.84% dividend growth CAGR, but its 49% turnover rate and sector concentration raise concerns. The ETF's top holdings have an average FCF yield of 6.54% and a reasonable P/FCF of 15, with solid but not outstanding growth rates.

Pacer Global Cash Cows Dividend ETF receives a Hold rating due to underwhelming returns, high costs, and liquidity concerns compared to peers. GCOW's free cash flow screening is conceptually sound but lacks additional risk controls, resulting in higher volatility and drawdowns than LVHI. LVHI outperforms GCOW on risk-adjusted returns, offers a higher yield, lower expense ratio, and better liquidity, making it a superior choice for global income investors.

GCOW offers diversified global exposure to high free cash flow and high dividend yield stocks, emphasizing value and income. The ETF's portfolio construction favors companies with strong free cash flow and dividend yields, resulting in lower P/E ratios than its benchmark. Key sector weights include health care, energy, and consumer staples, with top holdings like British American Tobacco and Chevron.

Many exchange-traded funds (ETFs) focus on holding dividend-paying stocks. While that gives income-seeking investors lots of options, it can make it difficult to know which is the best one to buy.

Dividend ETFs like TDV, TDIV, and GCOW are hitting 52-week highs as market volatility has boosted demand for steady income.

Exchange-traded funds (ETFs) make investing easy. These managed funds come with built-in diversification.

Making money usually requires a lot of effort. You have to actively work at a job.

I am upgrading GCOW to a buy due to improved momentum, attractive valuation, and strong alpha since my last review. GCOW offers high dividend yield and free cash flow exposure, appealing to value and income investors, with moderate risk and reasonable expenses. Energy sector overweight is a risk, but defensive allocations and large-cap value focus help cushion volatility; tech exposure is minimal.