Dividends can offer some meaningful ballast to investors, especially those at or near retirement. That source of income could have particular appeal amid increasing global uncertainty. Beyond being a source of income, dividends can also play an important role as a key source of information about potential equities investments.
Firms report reams and reams of information for analysts and investors to scrutinize. From revenue to EBIDTA numbers, stock prices to earnings-per-share data, plenty of metrics exist to paint a picture of a company’s past, present, and, sometimes, future. Dividends, however, can provide a particularly strong view into a firm’s future.
A company offering healthy dividends may be feeling confident about its future prospects. By the same token, decreasing dividends may indicate a notable degree of fear. Dividends, of course, should not be relied upon in isolation; plenty of firms offer healthy dividends but would fail to meet certain quality standards. That said, dividend analysis can be a powerful tool to build a portfolio.
Active ETFs, specifically, can get a great deal out of leaning into dividend data and yields. Active managers can bring their experience assessing a given economic sector, understanding it in a way that index fund managers may not. That can apply to dividends, too. Active managers can include dividend analysis in addition to fundamental research to put together a more advanced picture.
The Capital Group International Equity Select ETFTM (Canada), CAPI, is one example of a fund providing a healthy dividend yield of 2.16% as of January 31, 2025.