Key Points
The iShares Core Dividend Growth ETF (NYSEMKT: DGRO) tracks the Morningstar U.S. Dividend Growth Index, which includes U.S. companies that have increased their dividends for at least the last five consecutive years and maintain a payout ratio below 75%. The index excludes REITs and firms with dividend yields in the top 10% after excluding REITs.
As of now, DGRO’s holdings, including top asset Microsoft (NASDAQ: MSFT), have demonstrated robust dividend durability. Microsoft has raised its dividend for more than 20 years, with a payout ratio of just 14% against nearly $183 billion in cash from operations in 2026, enabling sustainable growth.
DGRO has averaged a total return of 12.2% since its inception in 2014, focusing on stocks that prioritize long-term dividend growth over immediate high yields. It yielded less than 2% over the last 12 months.
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