The trick when buying a dividend ETF is not to grab one that is heavily weighted in one sector. Financial, utility, communications and energy stocks are most likely to pay dividends. But if it's stable income you're after, you have to look at the holdings of any given ETF to make sure you aren't buying anything too sector-heavy.
The iShares Dow Jones Select Dividend Index (DVY) is a great place to start. The ETF is diversified across 10 major sectors, with no more than 32% in any one area (utilities). Its top holding includes cigarette maker Lorillard (LO) (4% of assets), followed by 2% holdings in Chevron (CVX), Entergy (ETR) and CenturyLink (CTL). It has returned 13.3% over the past year and this doesn't include it's current 3.2% yield.
Wisdom Tree Small Cap Dividend ETF (DON) is a great choice because - besides its 3.26% yield - it is well-diversified across many different sectors while focused on small-cap names. Small-cap companies have more room to grow and run than their super large-cap counterparts that pay similar dividends, offering greater possibility for capital gains along the way. The ETF has 30% in financials, 19% in real estate, 13% in industrials, and 10% in consumer cyclicals. No holding has more than 2.25% of the ETF's assets, and that holding is presently Ares Capital (OTC:ARESF). This choice is up 10.9% over the past year.
For those who can stomach a bit more risk while cutting back on the aforementioned diversification, you can look internationally. There's much to like about seeking for dividends across international borders, as well, especially if you seek diversification beyond domestic stocks. The SPDR S&P International Dividend ETF (DWX) yields a solid 4.19%. It's a bit more concentrated than I'd like, with 25% holdings in financials, communications, and utilities, and its top 10 holdings make up 37% of its assets. However, with additional risk comes additional reward. The ETF is up 17% over the past year, not including the dividends.