Dividend-paying stocks are an investor favorite, and many of the dividend focused exchange traded funds (ETFs) give investors better coverage with less risk than found in single stocks.
Some of the dividend-focused ETFs are so diversified that they could stand in as core holdings for a portfolio, remarks Paul Justice for Morningstar. When considering a dividend paying stock or ETF, the objective is to think growth over the long-term. Dividend investing is all about finding solid dividend stocks that are reasonably priced and are expected to continue raising their dividends in the future, explains Dividends4Life on iStock Analyst.
Do not confuse dividend investing with searching for high-yielding stocks to generate a high income. A majority of the time, the quality ones will not have outrageous yields, however the growing dividends over time could compensate.
Here is a small sample of dividend-paying ETFs. Note that this is not all-inclusive, and there are may other worthy ETFs delivering dividends to choose from:
- Vanguard Financials (VFH): yields 5.9%; down 5.2% year-to-date
- PowerShares International Dividend Achievers (PID): yields 6.2%; up 3.4% year-to-date
- SPDR S&P Dividend ETF (SDY): yields 6.4%; down 1.1% year-to-date
- SPDRS (SPY): yields 3.3%; up 1.4% year-to-date
- WisdomTree LargeCap Dividend (DLN): yields 4.8%; down 4.5% year-to-date
- Industrial Select Sector SPDR (XLI): yields 4%; down 2.3% year-to-date
- Diamonds Trust, Series 1 (DIA): yields 3.9%; up 2.8% year-to-date
- iShares S&P 100 (OEF): yields 3.7%; down 0.9% year-to-date
- iShares NYSE 100 (NY): yields 3.8%; down 2.9% year-to-date
- Rydex Russell Top 50 (XLG): yields 3.6%; down 1.6% year-to-date
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.