In a continued low-yield environment, investors may turn to stocks that have consistently raised dividends as a way to generate more attractive returns. For instance, the Vanguard Dividend Appreciation ETF (NYSEArca: VIG) tracks U.S. stocks that have increased dividends on a regular basis for at least 10 consecutive years and has a 2.44% 12-month yield. The Schwab US Dividend Equity ETF (NYSEArca: SCHD) includes 100 stocks based on strong fundamentals, dividend yields and consistent dividend payouts for at least 10 consecutive years, and it has a 3.2% 12-month yield. The SPDR S&P Dividend ETF (NYSEArca: SDY) holds firms that have a minimum dividend increase streak of 20 years for inclusion and shows a 2.56% 12-month yield. The ProShares S&P 500 Aristocrats ETF (NYSEArca: NOBL) only includes companies that have increased their dividends for at least 25 consecutive years and offers a 2.03% 12-month yield.
However, some strategists warn that these same dividend aristocrats may find it harder to continue their dividend growth themes, especially in the energy and materials space where companies are under pressure from the plunge in commodity prices. [Energy ETFs Watch]
“The chances that dividend growth is in line with the last five years over the next couple of years is pretty remote,” Nicholas Colas, chief market strategist at Convergex, told CNBC. “Corporations want to see top-line growth before they start estimating earnings power.”
For more information on dividend stocks, visit our dividend ETFs category.
Max Chen contributed to this article.