Companies with a record of raising dividends are more attractive than usual since they issue their dividends cautiously. These dividend payers typically include higher quality companies that are more cautious when raising dividends since they would do so without stretching their balance sheets.
Income-minded investors have also typically gravitated toward these high quality companies as firms that regularly raise dividends also tend to be confident about their ability to continue paying the dividends as the dividend increases are also calculated in line with future growth.
“Vanguard Dividend Appreciation ETF (VIG) and Vanguard High Dividend Yield ETF (VYM) are among the cheapest dividend-oriented funds available. VIG earns a Morningstar Analyst Rating of Gold while VYM earns a Morningstar Analyst Rating of Silver. The primary difference between the funds is that VIG targets dividend growth while VYM targets high-dividend yield,” according to Morningstar.
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