Tony Dong
5 min read
Quick Read
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SPYD returned 17.03% cumulative with dividends reinvested YTD through Sept. 1 versus 12.34% for SPYM, benefiting from the resurgence in value-oriented stocks during 2026.
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SPYD’s high-dividend screen doubles as a simple value strategy. Its portfolio trades at 17.06 times earnings versus roughly 25 times for the S&P 500, while offering a 4.28% 30-day SEC yield.
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The ETF charges just 0.07% and uses no derivatives, but its high 24.26% real estate allocation makes it less tax efficient than dividend ETFs that exclude REITs.
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Starting valuations have historically been one of the more useful predictors of long-term stock returns. Personally, I prefer measures such as free cash flow yield because earnings can be influenced by plenty of accounting adjustments, exclusions, depreciation policies, and other moving parts. Still, the price-to-earnings (P/E) ratio remains a useful yardstick for quickly assessing how much investors are paying for corporate profits.
Right now, the S&P 500 trades at roughly 25 times earnings. That’s not necessarily outrageously expensive, but it’s certainly not cheap either. Fortunately, getting broad exposure to the index remains inexpensive. The State Street SPDR Portfolio S&P 500 ETF (SPYM) charges just a 0.02% expense ratio. But according to Testfolio, SPYM had returned 12.34% cumulatively year to date through Sept. 1, while the State Street SPDR Portfolio S&P 500 High Dividend ETF (SPYD) returned 17.03%.
That dynamic fits with the broader resurgence in large-cap value stocks we’ve seen this year. SPYD is technically a high-dividend ETF, but its methodology also functions as a fairly straightforward value screen. Here’s why I like this ETF as a contrarian pick.
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How SPYD Finds High-Yield Stocks
SPYD tracks the S&P 500 High Dividend Index, which starts with an already well-established universe: the S&P 500. That means its potential holdings have already passed the index’s requirements surrounding market capitalization, liquidity, and positive earnings. From there, the methodology is remarkably simple. It identifies the 80 S&P 500 constituents with the highest dividend yields and builds its portfolio from those stocks, with quarterly rebalancing.
