DGRO Dividend Investment Complete Guide 2025
Pursue sustainable dividend growth with iShares Core Dividend Growth ETF π
The DGRO ETF is a dividend growth-focused ETF offered by BlackRock that invests in high-quality U.S. companies that have consistently increased their dividends for at least 5 years, providing long-term dividend growth and capital appreciation.
Use our dividend calculator to forecast your future dividend income and develop your investment strategy.
- - Current NAV: $62.22 (as of May 15, 2025)
- - 12-month trailing dividend yield: approximately 2.2%
- - Total assets under management: approximately $31.5 billion
- - Expense ratio: 0.08%
- - Year-to-date return (YTD): 0.33%
π‘ Note: DGRO pays dividends quarterly, typically in March, June, September, and December. The fund invests only in companies that have increased their dividends for at least 5 consecutive years, providing stable dividend growth potential.
DGRO (iShares Core Dividend Growth ETF) is a popular ETF among dividend growth investors. It tracks the Morningstar US Dividend Growth Index, investing in high-quality companies that have consistently increased their dividends for at least 5 years, providing stable dividend income and long-term capital growth.
DGRO Stock Analysis
Check detailed information about DGRO's complete dividend history and performance trends. Successful dividend investing starts with accurate information.
DGRO Portfolio Analysis
Check holdings, sector allocation, and financial metrics
DGRO Dividend History & Returns
Analyze complete dividend records, annual dividends, and return trends
DGRO Investment Tips
On the dividend information page, you can check DGRO's complete dividend history, dividend growth trends, real-time yields, and more. Also, use the dividend calendar to track upcoming ex-dividend and payment dates. DGRO has strict dividend growth criteria, making it relatively low-risk for dividend cuts as it consists of high-quality companies.
1. What is DGRO ETF?
DGRO is an ETF launched by BlackRock in June 2014 that tracks the Morningstar US Dividend Growth Index. This index consists of U.S. companies that have consistently increased their dividends for at least 5 years and have payout ratios below 75%, ensuring financial soundness. DGRO adopts a balanced approach that simultaneously pursues dividend growth potential and dividend sustainability.
Key Features
2. Understanding DGRO's Investment Strategy
2-1. Portfolio Composition
DGRO invests in U.S. companies that have been rigorously screened for dividend growth potential and sustainability. The portfolio is well-diversified across sectors including financials, healthcare, technology, and industrials, with each company being a proven dividend growth company that has consistently increased dividends for at least 5 years.
Top Holdings (Major Portfolio Weightings) - As of January 31, 2025
Sector Allocation (As of April 2025)
18.9%
19.5%
15.2%
12.6%
10.8%
7.7%
6.3%
9.0%
High-quality dividend growth portfolio consisting of 417 holdings
3. DGRO Dividend Characteristics
DGRO's dividends are characterized by stability based on consistent growth potential. Dividends are paid quarterly, and because all included companies are verified companies that have increased dividends for at least 5 years, dividend stability is very high.
DGRO's Dividend Growth Characteristics
Dividend Growth ETF Comparison
Source: BlackRock, as of May 2025
DGRO Annual Dividend Trends
DGRO's annual dividends per share over the past 5 years:
| Year | Dividend per Share ($) | YoY Growth (%) | Dividend Yield (%) |
|---|---|---|---|
| 2020 | $0.87 | 6.1% | 1.9% |
| 2021 | $0.94 | 8.0% | 1.8% |
| 2022 | $1.08 | 14.9% | 2.1% |
| 2023 | $1.18 | 9.3% | 2.1% |
| 2024 | $1.39 | 17.8% | 2.3% |
| 5-Year Average | - | 11.2% | 2.0% |
* Dividend yield is the ratio relative to the average stock price for that year.
* Based on BlackRock's official data (as of May 2025)
Advantages of DGRO's Dividend Growth
- β’ DGRO holds only companies that pass strict dividend growth criteria, resulting in low dividend cut risk.
- β’ With an average annual dividend growth rate of 11.2%, it maximizes compounding effects.
- β’ By selecting only companies with payout ratios below 75%, it ensures high dividend sustainability.
- β’ High weight in healthcare and technology stocks provides balanced pursuit of long-term growth potential and dividend growth.
4. Considerations When Investing in DGRO
Advantages
- βInvestment in high-quality dividend growth stocks through strict selection criteria
- βVery high dividend growth rate (5-year average 11.2%)
- βSustainability ensured with payout ratios below 75%
- βProven performance and stable management for over 10 years
- βReasonable expense ratio (0.08%) with excellent cost efficiency
Disadvantages
- β’Current dividend yield lower than other high-dividend ETFs
- β’Higher volatility due to growth stock weight for dividend growth
- β’Companies with less than 5-year dividend history excluded from investment
- β’Valuation may be relatively high due to high growth rates
- β’Unsuitable for investors needing high dividend income in the short term
5. DGRO Performance Analysis
Performance History
| Year | Total Return (%) | Dividend Yield (%) | S&P 500 Return (%) |
|---|---|---|---|
| 2020 | 8.12% | 1.9% | 18.4% |
| 2021 | 28.11% | 1.8% | 28.7% |
| 2022 | -5.79% | 2.1% | -18.1% |
| 2023 | 10.38% | 2.1% | 26.3% |
| 2024 | 16.23% | 2.3% | 23.9% |
| 2025 (YTD) | 0.33% | 0.5% | 3.12% |
Source: BlackRock official data (as of May 15, 2025)
DGRO Performance Analysis by Market Conditions
DGRO shows differentiated performance under the following market conditions:
Relative Strength in Down Markets
When the S&P 500 fell 18.1% in 2022, DGRO fell only 5.79%, showing relatively good defensive capabilities. High-quality dividend growth stocks provide stability during market downturns.
Excellent Long-term Total Returns
DGRO outperforms many dividend ETFs in total returns through dividend growth and price appreciation when held for 10+ years. The compounding effect is maximized especially with dividend reinvestment.
Balanced Sector Composition
With high weightings in healthcare (19.5%) and technology (15.2%), it secures long-term growth potential while also pursuing stability through traditional dividend stocks like financials (18.9%).
Key Insights
- Portfolio of high-quality companies selected through strict dividend growth criteria
- Balanced strategy pursuing both long-term dividend growth and capital gains
- Dividend sustainability ensured with payout ratio requirements below 75%
- Suitable ETF for investors wanting both growth potential and stability
6. DGRO's Distinctive Features
DGRO's Unique Investment Philosophy
π― 3-Stage Filtering System
Dividend Growth Criteria
Only companies with at least 5 years of consecutive dividend increases are selected
Financial Health Verification
Payout ratios below 75% ensure dividend sustainability
High-Yield Trap Avoidance
Excludes top 10% highest-yielding stocks to minimize dividend trap risks
π Quality-First Approach
- β’ Dividend Challengers and Above: Only companies with 5+ years of dividend growth
- β’ Financial Excellence: Stable cash flows and high return on equity
- β’ Shareholder-Friendly Management: Commitment and execution of continuous dividend increases
- β’ Sustainable Business Models: Long-term growth drivers
π Harmony of Growth and Income
- β’ Current Income: Stable quarterly dividends (2.2% annually)
- β’ Future Growth: High average dividend growth rate of 8.5%
- β’ Capital Gains: Participation in share price appreciation of excellent companies
- β’ Inflation Hedge: Maintaining purchasing power through dividend growth
π DGRO vs Other Dividend Strategies
High-Dividend ETFs
High current yields
But limited growth potential
DGRO
Balance of growth and income
Optimized long-term total returns
Growth Stock ETFs
High capital gains
But lack of current income
7. Frequently Asked Questions
Which is better between DGRO and VYM?
Both ETFs have different investment philosophies. DGRO focuses on 'dividend growth' with a current dividend yield of 2.2% but provides a high average dividend growth rate of 8.5%. VYM focuses on 'high dividends' with a current 3.0% dividend yield but relatively lower dividend growth rates. For long-term investors, DGRO's high dividend growth rate can bring greater dividend income over time. However, if you need high current dividend income, VYM might be more suitable.
What does DGRO's 5-year dividend growth criterion mean?
DGRO only invests in companies that have consistently increased their dividends for at least 5 years. This means such companies β have stable business models, β‘ possess sufficient cash generation capabilities, and β’ have shareholder-friendly management. These criteria significantly reduce dividend cut risks and allow for relatively stable dividends even during economic downturns. Note that among DGRO's top holdings, Johnson & Johnson has increased dividends for 62 years, and Procter & Gamble for 68 yearsβtrue dividend aristocrats.
What makes DGRO better than SCHD or VIG?
DGRO has several differentiated advantages compared to other dividend growth ETFs. First, while its current dividend yield is lower than SCHD (3.6%), it offers higher dividend growth rates. Second, it provides higher current yields than VIG (1.8%) while offering similar levels of dividend growth. Third, through Morningstar's strict selection criteria, it diversifies risk by investing in 417 high-quality companies. Fourth, with high weightings in healthcare (19.5%) and technology (15.2%), it can capture future growth potential as well.
Which investors is DGRO most suitable for?
DGRO is particularly suitable for the following types of investors: β Long-term investors: Those seeking compound dividend effects through 10+ year investments, β‘ Retirement planners: Those wanting moderate current income and increasing dividend income in the future, β’ Balance seekers: Those wanting balanced current income and future growth, β£ Dividend reinvestors: Those seeking to maximize compound effects by reinvesting dividends. Conversely, other alternatives might be more suitable for investors urgently needing high current dividend income or short-term investors.
What is the optimal strategy when investing in DGRO?
The key to DGRO investing is 'time and compounding.' β Dividend Reinvestment (DRIP): Automatically reinvest quarterly dividends to maximize compound effects. β‘ Regular investing: Invest a fixed amount monthly to offset market volatility and lower average purchase price. β’ Long-term holding: Hold for at least 10 years to experience the true value of dividend growth. β£ Tax efficiency: If possible, hold in tax-advantaged accounts like IRA or 401(k) to minimize dividend taxes. β€ Portfolio balancing: Use DGRO as core dividend investment while adding high-dividend or growth ETFs as needed to complete your portfolio.
8. Conclusion and Investment Strategy
Who is DGRO suitable for?
Suitable investor types:
- Investors pursuing both long-term dividend growth and capital gains
- Retirement planners wanting gradually increasing dividend income
- Younger investors more interested in future income growth than current income
- Investors wanting diversified investment in high-quality companies but without the burden of individual stock selection
- Long-term investors seeking to maximize compound effects through dividend reinvestment
Investor types who should be cautious:
- Investors who absolutely need high current dividend income immediately
- Investors needing monthly dividend income (DGRO pays quarterly)
- Investors planning short-term investments of less than 5 years
- Investors pursuing only pure capital gains over dividends
- Investors wanting high returns focused on technology or growth stocks
Effective DGRO utilization strategies:
- Core-satellite strategy: Use DGRO as portfolio core with SCHD or VYM as satellites
- Life-cycle strategy: Focus on DGRO when young, increase high-dividend ETF weight after retirement
- Dividend growth ladder: Combine DGRO, VIG, and SCHD to cover various dividend growth segments
- Tax optimization: Hold DGRO in tax-advantaged accounts, use tax-efficient ETFs in taxable accounts
- Regular rebalancing: Review portfolio 1-2 times annually and adjust weightings for risk management