Alternatively, investors have a number of high-quality dividend-paying stock ETFs to choose from. 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 2.16% 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 2.9% 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 2.39% 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 1.89% 12-month yield.
Related: ETFs That Value Investors Buffett, Munger Would Approve Of
Additionally, investors can also look to companies that reinvest their profits for future growth. The Elkhorn S&P 500 Capital Expenditures Portfolio (NasdaqGM: CAPX) targets companies that are diligently reinvesting in their businesses to increase market share and competitive moat. Specifically, CAPX takes the top 100 S&P 500 companies based on efficient capital expenditure as a way to track U.S. firms that have reinvested their money toward meaningful growth and innovation.
Related: Capex ETF Includes Companies That Invest and Return Value
“The problem I have with financial engineering is that it’s a sugar high that wears off way too quickly, and it doesn’t in my opinion often leave companies better off over the long term,” Goldberg added. “Companies that didn’t reinvest over the last 10 years are going to pay the price.”
For more information on dividend stocks, visit our dividend ETFs category.