Dividend ETFs for the Long Term
September 8th at 2:08pm by Tom Lydon
When it comes to dividend exchange traded funds, regular income payouts are an attractive feature, but the investments also provide portfolios with diversified, long-term market exposure.
Investors can utilize dividend ETFs to access a diverse range of dividend-paying stocks with one single trade, instead of picking out a couple company stocks that could tank or cut dividends.
Lawrence Meyers for InvestorPlace points out a couple of broad dividend ETF options.
The Consumer Staples Select Sector SPDR Fund (NYSEArca: XLP) tracks basic goods that people always purchases from companies like Procter & Gamble, Coca-Cola and Philip Morris, regardless of how the economy is doing. The fund includes 42 stock holdings. XLP has a 0.18% expense ratio and a 2.77% dividend yield. [Keeping up With the Consumer…With ETFs]
The iShares High Dividend ETF (NYSEArca: HDV) follows a group of companies screened for superior quality and financial health, and then tracks the top yielding stocks. The ETF tracks 75 holdings and the top components include stable names like AT&T, Chevron and Johnson & Johnson. HDV has a 0.40% expense ratio and a 3.21% 12-month yield.
The WisdomTree International MidCap Dividend Fund (NYSEArca: DIM) tries to reflect the performance of a fundamentally weighted index, which tracks dividend paying stocks outside North America that are weighted by annual cash dividends paid. The fund follows 563 companies. DIM has a 0.58% expense ratio and a 3.59% 12-month yield. [Why Investors are Looking at Foreign Stock ETFs for Income and Growth]
The iShares U.S. Utilities ETF (NYSEArca: IDU) the utilities sector, with big names like Duke Energy, Southern Co. and Nextera Energy. Well managed companies can meet operating expenses and dish out the rest to shareholders as dividends. IDU has 65 holdings, a 0.46% expense ratio and a 3.28% 12-month yield.
The iShares U.S. Preferred Stock ETF (NYSEArca: PFF) includes a basket of preferred, which provide a specified dividend paid before common stock holders and take precedence over common stocks in case the company goes under. PFF has 322 holdings, a 0.47% expense ratio and a 5.79% 12-month yield. [Preferred Stock ETFs Yielding 6% Still Chugging Along]
For more information on dividends, visit our dividend ETFs category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.