Stockchase Opinions

Mike Philbrick iShares Core MSCI CAD Qlty Div ETF XDIV-T BUY Jan 21, 2025

Great. Holds quality stocks, avoiding dividend traps.

$30.730

Stock price when the opinion was issued

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COMMENT

VDY vs XEI ETF? VDY and XEI is very similar and their prices track closely. VDY tends to hold higher financial sector exposure, where yields are generally higher. Whereas XEI holds the highest yield payers on the composite Index. He also likes XDIV which has the lowest MER (0.11%). It holds "quality" holdings, using an algorithm to pick higher ROE, lower levered companies with earnings stability.

BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

XDIV looks solid with a low MER and distribution yield near 5%. It is a smaller ETF with under $1B in assets under management but it did outperform some of the names on the list. The concentrated holdings likely allow XDIV to offer the lower MER that it provides but that can be riskier. XDIV does aim to invest in low risk companies however so the concentration risk is somewhat offset. We think XDIV is a decent income option. 
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BUY

Covered call gives extra income, but reduces capital gains. If bullish - would recommend an equity ETF without dividends. This option is good for dividend investors looking for income. Overall, a good product - just a question of investor preference. 

WEAK BUY
Slightly lagged TSX return over 5 years.

Basket of about 21 Canadian names; ENB is the top weighting, followed by TD, SU, and RY. Insurance, pipelines, banks, etc. Insurance adds the factor of quality. Total return about 10.7% over 5 years. Makes sense. Yield is ~4.5%.

No issues with it, but consider that the US is on stronger footing right now.