Dividend ETFs: Aristocrats vs. Achievers | ETF Trends

Yields are in the tank, so dividend payouts may be the next best thing to finding easy money right now. It may even improve as the recovery deepens and companies boost their payouts. Dividend exchange traded funds (ETFs) are an ideal way to get exposure to the different dividend types available.

There are two types of dividend-paying stocks: aristocrats and achievers.

The so-called dividend aristocrats are S&P 500 companies that have increased their payouts for 25 consecutive years without missing a beat, reports Gary Gordon for ETF Expert. The numbers say that aristocrats have bested the S&P 500 over five, 10, 15, 20 and 25 years with less beta volatility, Gordon notes.  [Dividends Are Making a Comeback.]

  • SPDR S&P Dividend Fund (NYSEArca: SDY) is the main aristocrat-only ETF that seeks to replicate the price and yield of the S&P High Yield Dividend Aristocrats Index. Only the 50 highest yielders are included. It’s one of the top domestic dividend ETFs year-to-date, up 3.6%. It’s also up 72.9% in the last year and yields 3.8%. [ETF Spotlight on SDY.]

  • Vanguard Dividend Appreciation (NYSEArca: VIG): This ETF tracks the the Mergent Dividend Achievers Select Index. To earn the “achiever” moniker, a company has to increase its dividends for at least 10 consecutive years and meet trading volume minmums. This fund did outdo the S&P 500 over the past four-year period. It’s up 1.7% year-to-date and up 51.7% in the last year. It yields 2.1%.

Other notable dividend achiever ETFs include PowerShares Dividend Achievers Portfolio (NYSEArca: PFM) and the PowerShares High Yield Equity Dividend Achievers Portfolio (NYSEArca: PEY). PFM yields 2.4%, while PEY yields 4.6%.

For more stories about dividends, visit our dividend ETFs category.

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.