Dividend growth stocks and exchange traded funds (ETFs) have helped investors access quality market exposure with attractive yields as well.
“With dividend growth strategies, you get quality companies that have delivered strong returns. You also get the potential for attractive effective yields,” according to a ProShares note.
For example, the rate of dividend growth for the S&P 500 Dividend Aristocrats Index has been 1.0% greater than the S&P 500 since 2005. The S&P 500 Dividend Aristocrats Index has also generated an effective yield of 3.5% five years ago in 2011, or 1.4 percentage greater than the effective yield generated by the broader market.
The S&P 500 Dividend Aristocrats Index acts as the underlying index for the popular ProShares S&P 500 Aristocrats ETF (BATS: NOBL) and is comprised of companies that have consecutively raised dividends for at least 25 years. NOBL currently shows a 1.98% 12-month yield, according to Morningstar data.
ProShares also offers the ProShares Russell 2000 Dividend Growers ETF (BATS: SMDV) and the ProShares S&P MidCap 400 Dividend Aristocrats ETF (BATS: REGL) for those seeking quality dividend growers in the small- and mid-cap categories, respectively.