“Many of these ETFs offer more intelligent designs than the first generation of dividend-focused ETFs. The improvement in structure is in response to some flaws in some of these older ETFs,” he wrote in a recent commentary on what he dubs Dividend ETFs 2.0.

Some of the other largest dividend ETFs include iShares High Dividend Equity Fund (NYSEArca: HDV), SPDR S&P Dividend ETF (NYSEArca: SDY), Vanguard High Dividend Yield Index Fund (NYSEArca: VYM), WisdomTree Dividend Top 100 Fund (NYSEArca: DTN), PowerShares International Dividend Achievers (NYSEArca: PID) and First Trust Morningstar Dividend Leaders (NYSEArca: FDL).

“In the current economic environment, we are concerned that the popularity of the highest-yielding dividend strategies has caused these stocks to become overpriced,” Rawson says. “On the positive side for dividend-paying stocks, dividend payout ratios are currently around 30%, much lower than the historical average of about 58%. This suggests a margin of safety should we enter a recession.”

These are the dividend ETFs that the Morningstar analyst categorizes as best of “the old guard”:

  • Vanguard Dividend Appreciation ETF (VIG)
  • Vanguard High Dividend Yield (VYM)
  • WisdomTree Total Dividend (DTD)
  • SPDR S&P Dividend (SDY)
  • First Trust Value Line Dividend Index (FVD)

These are dividend ETFs Morningstar doesn’t much care for that use a weighting system other than market cap:

  • PowerShares Hi-Yield Equity Dividend Achievers (PEY)
  • iShares Dow Jones Select Dividend Index (DVY)

Finally, Rawson says the “jury is still” out on these dividend ETFs in the new guard:

  • iShares High Dividend Equity (HDV)
  • PowerShares S&P 500 Low Volatility (SPLV)
  • PowerShares S&P 500 High Dividend Portfolio (SPHD)
  • Schwab U.S. Dividend Equity ETF (SCHD)
  • ALPS Sector Dividend Dogs (SDOG)

Full disclosure: Tom Lydon’s clients own DVY.