There are any number of equity ETFs that are designed to track an index of high paying dividend stocks, or an index of stocks of companies that have a consistent track record of dividend growth. One example of this sort of ETF is the IShares High Dividend ETF (HDV). There are two general drawbacks that go hand in hand with investing in these types of ETFs. First, there are management fees, which lowers the investor's take home pay. Second, there is the fact that many of the indexes that these ETFs are based on are capital weighted averages. The problem with any investment approach designed to mimic returns on a capital weighted average is that it necessarily entails buying high and selling low, which is why some will argue that equal weighted indexes tend to outperform capital weighted averages over time.
A more rational approach for investing in dividend paying stocks could be for an investor to simply look at the top holdings of some of the leading dividend oriented ETFs (those top holdings appear on any fact sheet for an ETF, generally found on the sponsor's web page), and buy those individual stocks directly - but to do so in a very particular way. Rather than trying to mimic an underlying index in terms of matching the precise weightings of various components in the index from time to time (which is what the ETF is designed to do), an individual could, for example, simply start out buying a roughly equal portion of each component stock that comprises the index. For instance, if I were considering investing in HDV, I might instead simply buy an equal portion of this ETF's top holdings - AT&T (T), Pfizer (PFE), J&J (JNJ), P&G (PG), Verizon (VZ), etc. Over time, instead of re-balancing my holdings to mimic the index that HDV is based on, I'd focus on buying whichever stocks in that index happen to be down the most at the time. For instance, whenever I got dividends to reinvest, I'd check to see which of AT&T, J&J, P&G, Verizon or Pfizer had fallen the most since I last reinvested dividends, and then I'd buy that stock. And then I'd repeat this exercise for as long as I could.
The goal would be to implement a genuine "buy and hold forever" strategy, and a simultaneous "buy on the dips" strategy. The approach removes one layer of management expenses, triggers fewer capital gains, but most importantly, it is a far more opportunistic approach than the automatic capital weighted average re-balancing approach prevalent in most of the largest dividend ETFs out there right now.
Disclaimer: I am not a professional investment advisor, and no portion of this article should be interpreted as investment advice, tax advice, or an endorsement or critique of any particular security.