DGRO ETF Price: Is DGRO at $69.17 Still the Better Dividend-Growth Bet?

Why DGRO ETF at $69.17 Still Screens as a Dividend-Growth Buy Over VYM

Price, yield and core positioning for NYSEARCA:DGRO

At a spot price of $69.17 (previous close $69.32, 52-week range $54.10–$70.60), the iShares Core Dividend Growth ETF – NYSEARCA:DGRO is trading just below its recent high while offering about a 2% yield and a 0.08% expense ratio on roughly $35.5–36 billion in assets. Daily volume around 296.5K shares is sufficient for institutional-sized trading without a liquidity premium. The label says “core dividend growth,” but once you dig into the rule set, holdings and growth-adjusted valuation, DGRO ETF behaves more like a long-term compounding engine than a simple high-yield product.

Rule-based engine behind DGRO ETF and portfolio structure

The backbone of NYSEARCA:DGRO is its index methodology: U.S. equities with at least five consecutive years of dividend increases and a cap that keeps payout ratios generally under 75% of earnings. That screen systematically filters for firms that can grow cash distributions out of recurring earnings, rather than one-off financial engineering. The top 10 holdings account for about 27% of assets and are dominated by large, liquid compounders: Apple, Johnson & Johnson, Exxon Mobil, JPMorgan, Broadcom, Microsoft, AbbVie, Merck, Procter & Gamble and Coca-Cola. The result is a portfolio built around dividend momentum and balance-sheet strength, not just headline yield.

*How Apple underpins growth quality inside NYSEARCA:DGRO

Apple is a central growth pillar for DGRO ETF, and its profile justifies the allocation. The company has built a roughly $100 billion annual Services business, delivering high-margin, recurring revenue that sits on top of iPhone hardware cycles. Between 2020 and 2024, Apple’s dividend climbed from $0.81 to $0.99 per share, a 22.22% increase, while its payout ratio is only 13.79%. That combination of double-digit dividend growth and a payout below 15% is exactly what you want in a dividend-growth ETF: a long runway for further distribution increases without adding financial strain. It also gives NYSEARCA:DGRO a scalable link to the broader AI and services transition without sacrificing income discipline.

Johnson & Johnson gives DGRO ETF defensive growth via oncology

Johnson & Johnson adds a defensive yet expanding earnings stream to DGRO ETF. The company’s $3.05 billion purchase of Halda Therapeutics is aimed squarely at oncology, with J&J projecting more than 1.7 million new prostate cancer diagnoses by 2030 for its lead program’s target market. From 2020 to 2024, JNJ’s dividend moved from $3.98 to $4.91, a 23.37% rise, and its 49.61% payout ratio sits squarely inside the classic 35–55% “healthy” band. Investors in NYSEARCA:DGRO are effectively getting exposure to a structurally growing therapeutic space with a shareholder policy that still retains about half of earnings for R&D and bolt-on deals, rather than over-distributing cash.

Exxon Mobil anchors DGRO ETF with energy cash flow and rising estimates

On the cyclical side, Exxon Mobil gives DGRO ETF direct leverage to energy cash flows. The dividend rose from $3.48 in 2020 to $3.84 in 2024, a 10.34% increase, despite capital spending and transition investments. Management’s recent planning update calls for raising incremental earnings expectations into 2030 by roughly 25% versus a previous $20 billion growth forecast. The Samref refinery upgrade with Saudi Aramco is one emblematic project aimed at supporting those numbers. The 58.14% payout ratio is above the ideal 55% ceiling but is still manageable for a mature, cash-heavy operator. For NYSEARCA:DGRO, XOM’s profile means exposed upside to energy earnings with a dividend policy that is assertive but not yet structurally unsustainable.

*Top-10 dividend growth math: why a 2% yield understates DGRO ETF

The income engine of NYSEARCA:DGRO is the compound growth of its biggest weights. From 2020 to 2024, the top 10 holdings delivered the following dividend increases: Apple from $0.81 to $0.99 (22.22%), Johnson & Johnson from $3.98 to $4.91 (23.37%), Exxon Mobil from $3.48 to $3.84 (10.34%), JPMorgan from $3.60 to $4.60 (27.78%), Broadcom from $1.34 to $2.17 (61.94%), Microsoft from $2.09 to $3.08 (47.37%), AbbVie from $4.72 to $6.20 (31.36%), Merck from $2.36 to $3.12 (32.20%), Procter & Gamble from $3.12 to $3.96 (26.92%), and Coca-Cola from $1.64 to $1.94 (18.29%). Weighted by portfolio weight, the average five-year dividend growth rate across these names is 30.32%. The headline 2% yield on DGRO ETF is therefore misleading if viewed in isolation: you are buying a 2% cash stream that has been compounding at roughly 30% at the top of the book, even if that pace logically slows into high single digits over the next leg of the cycle.

Payout ratio stress points inside NYSEARCA:DGRO and what they imply

The sustainability question comes from payout ratios, not growth history. Using the 35–55% band as a “healthy” reference range, the top 10 names in DGRO ETF look like this: AAPL 13.79%, JNJ 49.61%, XOM 58.14%, JPM 27.49%, AVGO 60.20%, MSFT 24.18%, ABBV 496.97%, MRK 42.80%, PG 60.98%, KO 67.55%. Only Johnson & Johnson and Merck sit neatly inside the 35–55% zone. Three – Apple, JPMorgan and Microsoft – are well below that threshold, which actually gives NYSEARCA:DGRO meaningful embedded optionality for future dividend hikes if boards choose to shift more cash from buybacks into distributions. The pressure is concentrated at the high end: Exxon Mobil, Broadcom, Procter & Gamble and Coca-Cola all run above 58%, and AbbVie’s 496.97% GAAP payout flags a temporary mismatch between reported earnings and cash distributions. Given the fund’s rule that screens out companies paying out more than 75% of earnings, extreme outliers are watched and naturally constrained over time, but you should still assume that dividend growth from the most stretched payers will track earnings more tightly or slow until coverage ratios reset.

Valuation of DGRO ETF versus VYM and VOO on a growth-adjusted basis

On raw multiples, NYSEARCA:DGRO is not cheap, but the picture changes once growth is included. DGRO ETF trades around 23.37× earnings and 3.9× book, with a ~2% yield. Vanguard High Dividend Yield ETF (VYM) screens cheaper at roughly 20.4× P/E and 2.9× P/B, and a broad market tracker like VOO sits richer at around 30.5× P/E. On those metrics alone, DGRO looks about 13% more expensive on P/E and 26% richer on P/B than VYM, while still discounted versus the S&P 500. But once you run a PEGY-style lens (P/E divided by growth plus yield), VOO comes out near 4.5, VYM around 3.1, and DGRO ETF around 2.6. In other words, per unit of dividend growth plus yield, you are paying less for DGRO than for a high-yield basket or for the broad index, largely because of its tilt toward tech-heavy, high-growth dividend payers. A portfolio whose largest contributors have grown dividends by 30.32% while still yielding about 2% justifies a 23.37× multiple in a way that static high-yield portfolios do not.

Why NYSEARCA:DGRO screens stronger than VYM despite lower yield

Relative to VYM, the trade is straightforward. VYM charges a lower fee at 0.06% versus 0.08% for DGRO ETF, controls over $84 billion compared with $35–36 billion for DGRO, and runs a lower turnover rate – about 13% versus 25%. Its portfolio companies collectively deliver a slightly higher 18.0% average ROE, compared with about 16.7% for DGRO. On pure value and balance-sheet quality, VYM is not a weak choice. However, DGRO deliberately leans more into dividend growth and tech exposure: its top 10 include Apple (3.29% weight), Microsoft (2.74%) and Broadcom (2.54%), all deeply embedded in structural themes like AI infrastructure, subscription software and high-margin networking chips. That tilt is what drives DGRO ETF’s lower 2.6 PEGY versus VYM’s 3.1, despite the higher headline P/E. You are giving up a touch of current yield and a couple of basis points in fees to own a portfolio where growth-adjusted valuation is actually better and where the distribution runway is longer.

Risk profile of DGRO ETF: income trade-offs and structural constraints

The risk set for NYSEARCA:DGRO is not exotic, but it is specific. With a 2% yield and a diversified sector allocation that includes healthcare, staples, financials and tech, DGRO ETF is not built to lead in speculative melt-up phases; growth-heavy indices will outrun it in pure price appreciation during those windows. The 25% turnover is higher than ultra-low-turnover broad funds and implies some trading friction and potential tax drag, even though it remains modest compared with active managers. On payout health, 8 of the top 10 holdings sit outside the “ideal” 35–55% band – three below, five above – which means some companies will need to balance dividend ambitions against capex, buybacks and deleveraging if conditions tighten. That said, the index’s 75% payout ceiling and the natural diversification across Apple, JNJ, Exxon Mobil, JPMorgan, Broadcom, Microsoft, AbbVie, Merck, Procter & Gamble and Coca-Cola materially reduce the probability that a handful of aggressive payers can derail the ETF’s overall income trajectory.

Verdict on NYSEARCA:DGRO at $69.17: buy, hold or sell?

At $69.17, just 2.0% below its $70.60 52-week high and roughly 28% above the $54.10 low, DGRO ETF is neither distressed nor priced for perfection. You are getting a 2% current yield, a top-10 basket that has compounded dividends at 30.32% over four years, a 23.37× earnings multiple that is justified by that growth, and a growth- and yield-adjusted PEGY near 2.6 that undercuts both VYM and VOO. The concentration in high-quality dividend growers with disciplined payout frameworks means the fund can continue lifting distributions even if headline price returns moderate. On the data as it stands – yield, dividend growth, payout distribution, sector tilts and relative valuation – NYSEARCA:DGRO is a Buy with a bullish long-term bias, suitable as a core equity-income position for investors willing to accept moderate volatility in exchange for rising cash flows rather than chasing maximum short-term upside.

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