Oil Majors Anchor Dividend ETF, but Risks Lurk in Falling Prices

The iShares Core High Dividend ETF (HDV) holds about 26% of its assets in energy and pharmaceutical sectors. Exxon Mobil, Chevron, Johnson & Johnson, and AbbVie make up a significant portion of this allocation.

Exxon and Johnson & Johnson are considered safe due to their strong cash flows and long dividend streaks. Chevron is also viewed as safe, but with improved cash flow and debt reduction. However, AbbVie carries more leverage risk as it grows.

The stability of HDV's income depends on oil prices remaining steady and AbbVie's product transition succeeding. If oil prices fall sharply, risks rise, and if leverage issues worsen, this could further exacerbate the situation.