Richard Orrell Vanguard FTSE Cdn High Div Yd. VDY-T COMMENT Mar 10, 2025

When you go for high-dividend payers in Canada you get the banks, insurance companies, pipelines, and some of the energy names. Yield will be a bit over 4%. A nice way to play.

Vanguard, iShares, and BMO all have offerings, but they all do it slightly differently. BMO has a covered call version, ZWC. There's ZDV, XDV, VDY. Take a look at them all and see what you like. All have different weights to the components. They're all equally good.

It holds quality companies that pay dividends. It's hard to go wrong with Vanguard, which are very low priced. This holds 56% financials, 24% energy and 8% utilities. This is where you find Canadian yields.

Generally likes the dividend payers, depending on the investor. Good if you're looking for income and steady growth. Be aware that a lot of the weighting is bunched around the Canadian banks, with energy companies following. Steady performance, value play. Dividend is fine and growth will be there.

Both are great examples of an ETF with Canadian names. Between 4.9-5.3% dividend yield. VDY has more banking exposure, so it depends on how much concentration you want in the Canadian banks. 

Basket of Canadian stocks with dividend quality. A good choice.

Likes it. Pays a dividend. Over time, this will keep pace with the market, Your return is income-oriented, which is good in volatile markets now and in the future. Is conservative, but likes that it generates income.

Well run, paying ~22 bps. Basket of high-dividend-paying Canadian names. Note that there are a lot of banks in here, about 43%. Plus another 10% insurance. Yield is around 5%.

Great strategy, though he prefers XEI.

ETFs that focus on the dividend growers will concentrate on companies with really strong fundamentals such as ROE, free cashflow, and long-term history of raising dividends during ups as well as downs. The high payers will probably look at market capitalization and what's paying the highest dividend. Less concerned about quality. 

This question precludes ETFs with covered call writing, as those are capital gains distributions rather than dividends.

VDY tracks performance of Canadian companies with high dividends. MER is about 0.22, yield is ~4-5%. Doesn't prioritize dividend growth.

Conversely, XDIV looks at dividend growers and their dividend sustainability and growth metrics. Concerned with growth of future dividends. MER is 0.10. Dividend yield is lower, about 4%.

Similar to XEI, but VDY is 45% banks compared to 24% for XEI. If you really like Canadian banks, then this might be the one for you. If you want to be more diversified, which he'd encourage, XEI might be better. Returned 17% on average for each of last 5 years. Yield is 3.6%.