DGRO
iShares Core Dividend Growth ETF
DGRO tracks the Morningstar US Dividend Growth Index, selecting companies with 5+ consecutive years of dividend increases and sustainable payout ratios. Market-cap weighted with quality screening. Focuses on consistent dividend growth with moderate yield.
HDV
iShares Core High Dividend ETF
HDV tracks the Morningstar Dividend Yield Focus Index, selecting companies with sustainable high dividends and strong financial health. Multi-factor approach combining yield, quality, and value. Focuses on high current income with quality overlay.
Key Metrics Comparison
| Metric | DGRO | HDV | Winner |
|---|---|---|---|
| Dividend Yield | 2.35% | 3.85% | HDV (+1.50%) |
| Expense Ratio | 0.08% | 0.08% | Tie |
| 5-Year Annual Return | 10.8% | 9.1% | DGRO (+1.7%) |
| Number of Holdings | 432 | 78 | DGRO (5.5x more) |
| Assets Under Management | $26.4B | $8.7B | DGRO |
| 5-Year Dividend Growth | 7.2% | 3.8% | DGRO (+3.4%) |
| P/E Ratio | 19.2 | 15.8 | HDV (cheaper) |
| Beta vs S&P 500 | 0.86 | 0.78 | HDV (lower risk) |
Performance Comparison
DGRO Performance
Superior total returns with moderate yield. Broad diversification (432 holdings) reduces risk. Strong dividend growth combats inflation. Equal expense ratio (0.08%) with HDV. Growth-oriented portfolio with quality screening. Better long-term compounding.
HDV Performance
High current income with solid total returns. Multi-factor quality screening for safety. Lower beta provides defensive characteristics. Concentrated portfolio (78 holdings) for yield focus. Strong financial health metrics. Better downside protection.
Strategy Analysis
DGRO Approach
Dividend growth with quality overlay:
- Tracks Morningstar Dividend Growth Index
- Companies with 5+ years dividend increases
- Payout ratio screening (≤75%)
- Market-cap weighted methodology
- 432 holdings for broad diversification
- Quality and growth emphasis
- Moderate turnover strategy
- Balanced growth and income
HDV Approach
High yield with quality focus:
- Tracks Morningstar Dividend Yield Focus Index
- Multi-factor screening (yield + quality)
- Financial health and stability focus
- Concentrated portfolio (78 holdings)
- Yield-focused but quality-controlled
- Defensive characteristics emphasized
- Value and income combination
- Lower volatility strategy
Quality Screening Comparison
Both ETFs emphasize quality but with different methodologies: DGRO focuses on growth consistency, HDV focuses on financial health and yield sustainability.
Screening Criteria
Dividend History: DGRO 5+ years vs HDV no minimum
Payout Ratio: DGRO ≤75% vs HDV sustainability focus
Financial Health: Both strong, HDV more comprehensive
Yield Requirement: DGRO moderate vs HDV high
Financial Metrics
ROE: DGRO 20% vs HDV 18%
Debt/Equity: DGRO 1.1x vs HDV 0.8x
Interest Coverage: DGRO 8x vs HDV 12x
Current Ratio: DGRO 1.5x vs HDV 1.8x
Portfolio Characteristics
Turnover: DGRO 25% vs HDV 20%
Dividend Safety: Both strong, HDV slightly higher
Growth Potential: DGRO superior vs HDV moderate
Income Stability: HDV superior vs DGRO good
Growth vs Income Trade-off Analysis
DGRO prioritizes dividend growth while HDV balances high yield with quality control.
Growth Characteristics
Revenue Growth: DGRO 7.5% vs HDV 4.2%
EPS Growth: DGRO 6.8% vs HDV 3.5%
Dividend Growth: DGRO 7.2% vs HDV 3.8%
ROE Growth: DGRO 1.8% vs HDV 0.5%
Income & Value Metrics
Current Yield: DGRO 2.35% vs HDV 3.85%
Payout Ratio: DGRO 48% vs HDV 62%
P/E Ratio: DGRO 19.2 vs HDV 15.8
Dividend Coverage: DGRO 2.1x vs HDV 1.6x
Risk & Defensive Metrics
Beta: DGRO 0.86 vs HDV 0.78
Max Drawdown (2020): DGRO -33% vs HDV -28%
Volatility: DGRO 13.8% vs HDV 12.1%
Downside Capture: DGRO 82% vs HDV 72%
Sector Allocation Comparison
Sector Weighting Differences
DGRO's growth focus creates tech exposure while HDV's yield focus creates healthcare and consumer staples tilt.
Information Technology
Healthcare
Financials
Consumer Staples
Income Analysis
DGRO Income Profile
Moderate current yield with strong growth. Broad diversification provides income stability. Strong dividend growth combats inflation. Equal costs (0.08%) with HDV. Growth-oriented for long-term income building. Better inflation protection.
HDV Income Profile
High current income with moderate growth. Quality screening ensures dividend safety. Lower beta provides stable income. Healthcare and staples heavy for defensive income. Multi-factor approach balances yield and quality.
Historical Performance & Backtesting
Long-Term Performance Comparison
DGRO has outperformed HDV over longer periods due to better growth, despite HDV's higher yield.
Since 2013 (HDV inception)
Maximum Drawdown (2020)
Sharpe Ratio
Dividend Growth
Top Holdings Comparison
DGRO Top Holdings (Market-Cap Weighted)
Note: Market-cap weighted, 432 holdings, diversified sectors
HDV Top Holdings (Multi-Factor Weighted)
Note: Multi-factor weighted, 78 holdings, healthcare/defensive heavy
Investment Recommendation
📈 Choose DGRO If:
- Superior total returns are priority (10.8% vs 9.1%)
- Dividend growth is key (7.2% vs 3.8%)
- Broader diversification matters (432 vs 78 holdings)
- You have 10+ year time horizon
- Growth characteristics appeal to you
- Inflation protection through growth matters
- Tech exposure aligns with your views
- You prefer growth-oriented dividend strategy
🛡️ Choose HDV If:
- High current income is priority (3.85% vs 2.35%)
- Defensive characteristics matter (beta 0.78 vs 0.86)
- Dividend safety is paramount
- Downside protection is valuable
- You're approaching or in retirement
- Healthcare/defensive exposure preferred
- Multi-factor quality screening appeals to you
- Lower volatility portfolio desired
💡 Portfolio Construction Strategy
For younger investors: Focus on DGRO (80-90%) for maximum growth. For retirees: Use HDV as core (60-70%) for income with DGRO satellite (30-40%) for growth. For balanced approach: 50% DGRO + 50% HDV provides ~3.10% blended yield with better growth than HDV alone. Consider combining with SCHD: 40% SCHD + 30% DGRO + 30% HDV provides balanced quality/growth/income. Important: The 1.50% yield gap means HDV pays 64% more income initially. However, DGRO's superior growth (7.2% vs 3.8%) means income parity occurs in ~6-7 years. Both have equal expense ratios (0.08%). During growth markets, DGRO outperforms. During defensive/value markets, HDV holds up better. HDV's concentrated healthcare exposure provides defensive characteristics but less diversification.