Quick Read
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DIVO returned 18% year-to-date through mid-December 2025 with a 4.7% yield from quality dividend stocks.
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Top holdings maintain conservative payout ratios between 22% and 31% except IBM at 80%.
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JEPI offers 8.2% yield through options premiums but distributions fluctuate from $0.33 to $0.54 monthly versus DIVO’s stable $0.16 to $0.21.
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Monthly income ETFs have surged in popularity as investors seek steady cash flow. The Amplify CWP Enhanced Dividend Income ETF (NYSEARCA:DIVO) takes a different approach, focusing on quality dividend-paying equities rather than covered calls. With a 4.7% yield exceeding the 10-year Treasury, monthly distributions, and an 18% total return year-to-date through mid-December 2025, DIVO offers a compelling blend of income and growth.
How DIVO Generates Income
DIVO produces yield primarily through dividends from blue-chip companies, not options premiums. The fund holds a concentrated, equal-weighted portfolio of approximately 25 dividend-growth stocks, with top positions including IBM, Microsoft, American Express, Caterpillar, and JPMorgan Chase each representing roughly 5% of assets. This differs sharply from alternatives like JEPI, which generates an 8.2% yield largely through selling call options.
Dividend Safety Assessment: Top Holdings Analysis
The sustainability of DIVO’s distributions depends on the dividend health of its largest positions. Analysis of the top five holdings reveals conservative payout ratios and strong fundamentals.
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IBM (5.19% weighting) carries the highest payout ratio at 80%, paying $6.70 annually on $8.40 in earnings. While elevated, IBM’s 30.2% return on equity and 17.7% year-over-year earnings growth provide adequate support.
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Microsoft (5.15% weighting) represents premium quality with just a 24% payout ratio on its $3.40 annual dividend. With a 35.7% profit margin, 32.2% ROE, and 18.4% revenue growth, Microsoft’s dividend appears exceptionally safe despite the modest 0.71% yield.
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American Express (5.10% weighting) pays out 22% of earnings as dividends, one of the most conservative ratios in the portfolio. The company’s 33.9% ROE and 18.6% earnings growth demonstrate robust financial health.
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Caterpillar (5.08% weighting) maintains a 31% payout ratio with its $5.84 dividend. Despite a recent 3.6% earnings decline, CAT’s 46.3% ROE and strong operating margins suggest the dividend remains well-supported.
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JPMorgan Chase (4.93% weighting) pays 28% of earnings as dividends, with a $5.55 annual distribution backed by 34.7% profit margins and 16% earnings growth.
Total Return Performance
DIVO’s 18% total return year-to-date significantly outpaces its dividend yield alone. While many investors may choose DIVO for the yield, the nearly 13% appreciation in 2025 stands out as one of the rare ‘have your cake and eat it to’ ETFs on the market today. DIVO is almost single-handedly demonstrating that quality dividend stocks can provide both income and capital appreciation.
Alternative to Consider: JEPI
Investors seeking higher immediate income should evaluate the JPMorgan Equity Premium Income ETF (NASDAQ:JEPI). With $41.5 billion in assets and an 8.2% yield, JEPI generates monthly income primarily through selling call options. The fund offers lower expenses at 0.35% versus DIVO’s 0.56%, but distributions fluctuate significantly based on market volatility. JEPI paid between $0.33 and $0.54 per share monthly in 2025, compared to DIVO’s more stable $0.16 to $0.21 range. For investors prioritizing yield stability and dividend growth over maximum income, DIVO’s quality-focused approach may prove more durable.
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