10 Dividend-Yielding ETFs to Consider

Dividend-paying stocks are an investor favorite, and many of the dividend focused ETFs give investors better coverage with less risk than found in single stocks.

Some of the dividend-focused ETFs are so diversified that they could stand in as core holdings for a portfolio, remarks Paul Justice for Morningstar. When considering a dividend paying stock or ETF, the objective is to think growth over the long-term. Dividend investing is all about finding solid dividend stocks that are reasonably priced and are expected to continue raising their dividends in the future, explains Dividends4Life on iStock Analyst.

Do not confuse dividend investing with searching for high-yielding stocks to generate a high income. A majority of the time, the quality ones will not have outrageous yields, however the growing dividends over time could compensate.

Here is a small sample of dividend-paying ETFs. Note that this list is not all-inclusive, and there are may other worthy ETFs delivering dividends to choose from:

• Vanguard Financials (VFH): yields 5.9%; down 5.2% year-to-date
• PowerShares International Dividend Achievers (PID): yields 6.2%; up 3.4% year-to-date
• SPDR S&P Dividend ETF (SDY): yields 6.4%; down 1.1% year-to-date
• SPDRS (SPY): yields 3.3%; up 1.4% year-to-date
• WisdomTree LargeCap Dividend (DLN): yields 4.8%; down 4.5% year-to-date
• Industrial Select Sector SPDR (XLI): yields 4%; down 2.3% year-to-date
• Diamonds Trust, Series 1 (DIA): yields 3.9%; up 2.8% year-to-date
• iShares S&P 100 (OEF): yields 3.7%; down 0.9% year-to-date
• iShares NYSE 100 (NY): yields 3.8%; down 2.9% year-to-date
• Rydex Russell Top 50 (XLG): yields 3.6%; down 1.6% year-to-date

Comments

[asaf123:]

Are you certain about the 3.3% yield on SPY? There have been very significant dividend cuts from the S&P 500 companies, so the 3.3% yield is a trailing dividend. I would be surprised if the forward dividend is greater than 1.5%, making SPY look pricy.

May 10 10:24 PM

[anarchist:]

If you have a serious interest in dividend stocks don't mess with these dogs mentioned above. Read Cliff Wachtel's articles and get some insight into real dividends. Start with his first articles that gives an overview of how to use hedges-don't saddle yourself with stocks that pays 6 % and isn't even a dividend achievers.

May 11 02:13 AM

[searcher:]

The better of many possibilities is to have an investment equity with growing dividends and a falling yield!

May 11 02:08 PM

[Living4Divi...:]

I agree with you - 3.3% looks a little high. Could it be due it being a trailing yield and not a forward yield?


On May 10 10:24 PM asaf123 wrote:

> Are you certain about the 3.3% yield on SPY? There have been very
> significant dividend cuts from the S&P 500 companies, so the
> 3.3% yield is a trailing dividend. I would be surprised if the forward
> dividend is greater than 1.5%, making SPY look pricy.

May 11 02:24 PM

[Living4Divi...:]

Tom Lydon - Thanks for the article. Please note that many of the while many of the ETFs listed DO pay dividends, they aren't rightly classified as "dividend-focused ETFs" - most of the following are merely market portfolios - cap-weighted portfolios. They are:

# SPDRS (SPY): yields 3.3%
# Industrial Select Sector SPDR (XLI): yields 4%;
# Diamonds Trust, Series 1 (DIA): yields 3.9%;
# iShares S&P 100 (OEF): yields 3.7%;
# iShares NYSE 100 (NY): yields 3.8%;
# Rydex Russell Top 50 (XLG): yields 3.6%;

May 11 02:33 PM

[Baboon:]

Agree with you. Astute investors pay attention to the total return of their investment not to what it yields.


On May 11 02:08 PM searcher wrote:

> The better of many possibilities is to have an investment equity
> with growing dividends and a falling yield!

May 11 03:24 PM

[samadams:]

you left out the best of the lot VIG

Jul 02 09:58 PM