Is the TD Growth ETF Portfolio's 0.045 Dividend a Steal? A Yield Comparison Amid Market Volatility

The TD Growth ETF Portfolio (TGRO:CA) has declared a monthly dividend of CAD 0.045 per share, maintaining its payout at this level since early 2025. While this may seem modest at first glance, evaluating its attractiveness requires a deeper dive into its yield, historical trends, and how it stacks up against sector peers. Let's dissect the numbers to uncover whether this dividend represents a value opportunity in today's market.

TGRO:CA's Dividend in Context

As of June 2025, the ETF's trailing twelve-month dividend yield is 2.06%, based on its latest distribution and a current price hovering around CAD 23.54 (inferred from day high/low data of CAD 23.33–23.42). This yield reflects a 28.57% increase from its 2024 payout of CAD 0.035, signaling a deliberate strategy to boost income for investors. However, the ETF's yield lags behind global peers like the TD Active Global Enhanced Dividend ETF (TGED:CA), which offers a 4.6% yield, and the CI Morningstar International Value ETF (VXM.B) at 3.13%.

Why the Yield Gap Matters

The disparity in yields highlights differing risk-return profiles:
- TGRO:CA: Focuses on Canadian equities and mutual funds, with an allocation skewed toward North American stocks (80%) and mutual funds (20%). Its moderate yield aligns with its growth-oriented mandate, prioritizing capital appreciation over income.
- TGED:CA and VXM.B: These global ETFs target high-dividend sectors like energy and utilities, leveraging international diversification to amplify payouts. Their higher yields come with greater equity sensitivity and currency risk.

Market Conditions: A Double-Edged Sword

Current markets are characterized by elevated volatility and sector-specific headwinds, such as energy's exposure to commodity price swings and utilities' sensitivity to interest rates. TGRO's lower yield may appeal to investors seeking a buffer against market turbulence, as its Canadian equity focus could offer steadier performance compared to global peers.

However, the ETF's P/E ratio of 28.67 suggests it trades at a premium, raising questions about valuation sustainability. Meanwhile, TGED's MER of 0.52% and exposure to volatile sectors like telecoms (a TGED holding) could erode returns during downturns.

The Case for TGRO:CA as a Core Holding

TGRO's 2.06% yield isn't a deal-breaker when viewed holistically:
1. Risk Mitigation: Its Canadian tilt shields it from extreme global macro risks, such as geopolitical conflicts or currency devaluations affecting TGED.
2. Growth Potential: With a focus on long-term capital appreciation, it aligns with investors seeking a balance between income and equity growth.
3. Lower Fees: Its MER of 0.42% (implied by data on peer fees) is competitive, especially versus actively managed rivals like TGED.

Investment Thesis: Proceed with Caution

While TGRO isn't the highest-yielding option, it offers diversification benefits and a moderate risk profile. Investors should consider:
- Time Horizon: Hold for the long term to capitalize on compounding growth.
- Portfolio Mix: Pair it with higher-yielding peers like VXM.B for income diversification.
- Market Timing: Avoid chasing yield in volatile sectors; prioritize ETFs with strong payout histories, like TGRO's consistent monthly distributions since 2023.

Final Verdict

The TD Growth ETF Portfolio's CAD 0.045 dividend isn't a steal in absolute terms, but it's a prudent choice for investors prioritizing stability and growth over maximum income. While sector peers like TGED offer juicier yields, their risks may outweigh the benefits in an uncertain market. For a balanced portfolio, TGRO serves as a reliable core holding—buy if you're in it for the long game.

This analysis is based on publicly available data as of June 2025. Past performance does not guarantee future results. Always consult a financial advisor before making investment decisions.