Seven High-Yielding ETFs

Back from Key West thirty six hours late, thanks to Delta. I had the opportunity to read lots of financial clutter in paradise - a tedious task the Keys made pleasant. Between the Mohitos,fresh fish and other assorted culinary delights, I navigated a conclusion that earning a nice yield (assuming a stable dollar, more reasonable fuel cost expectations and other commodity cost stabilization) with ETFs and stocks that are less thrilling than the double shorts and other eclectic plays should be just fine for Mr. and Ms. Investor. And perhaps for more sophisticated investors such as yourself.

The following ETFs are higher yielding securities that one may consider to fulfill this theme:

• (HYG) iShares iBoxx $ High Yield Corporate Bond at 8.06% priced at $93.63
• (IPE) SPDR Barclays CapiTIPS at 5.41% priced at $51.35
• (LAG) SPDR Lehman Aggressive Bond at 4.87% priced at $52.78
• (SDY) SPDR S&P Dividend at 4.63% priced at $47.34
• (PGF) PowerShares Financial Preferred at 7.32% priced at $18.71
• (FDL) FirstTrust Morningstar Dividend at 5.66% priced at $15.72
• (CVY) Claymore Zacks Yield at 6.77% priced at $20.52

Within my own portfolios, I have added certain stocks that appear to have a positive future and sustainable income to provide for current yield and future dividend increases in line with the company's history. Here are a few to ponder:

• (AEE) Ameren at 6.28% priced at $40.46
• (ATG) AGL Resources at 5.03% priced at $33.39
• (BMY) Bristol-Myers Squibb at 5.66% priced at $21.89
• (CINF) Cincinnati Financial at 5.64% priced at $27.64
• (ED) Consolidated Edison at 6.00% priced at $39.00
• (EPD) Enterprise Products Partners, LP at 7.04% priced at $29.25
• (GE) General Electric at 4.23% priced at $29.33 (if management changes)
• (LRY) Liberty Property Trust at 6.80% priced at $36.74
• (PFE) Pfizer at 6.71% priced at $19.07
• (RAI) Reynolds American at 6.51% priced at $52.21
• (SO) Southern Company at 4.77% priced at $35.23
• (T) AT&T at 4.54% priced at $33.06
• (USB) US Bancorp at 5.56% priced at $30.60
• (WFC) Wells Fargo at 4.47% priced at $30.45

Other companies such as Dow Chemical (DOW), Verizon (VZ) and a host of pipeline MLPs deserve consideration on merit.

The point being:

If a generally passive investor wishes to construct a handsome income stream in dollars using a diversified mix of sectors, ETFs and stocks, now is a great time to execute.

Comments

[saluki65]

Good idea, after going trough some gut wrenching twists and turns. As an income investor I have started doing this same thing and have added already some of the mentioned stocks and will be moving more money toward this type. Heck, even my investment grade preferreds have been extremely volatile.

[jackooo]

With inflation for this year predicted in the low 4% range you need at least 5 1/2% to break even after taxes. Of course a Roth Ira could get by on 5%.

[DaveBlz]

Another ETF is the S&P Dividend Aristocrats, consisting of companies that have consistently raised their dividends. I read about it in an article written by an S&P advisor. But the S&P website only has an 8-digit symbol (which doesn't work) and S&P in New York did not know what the regular symbol is. If anyone does, please add it to comments.

[ArtfulDodger]

Income is fine. But has the market priced in the possibility of an Obamba presidency, where dividends would be taxed much higher than they are today?

If not would any strictly dividend play not be a risky play over the next couple of months, at least until we find out which bum will have Air Force One for the next four years?

[d_teller]

To DaveBiz, above, try DVY and PEY, but don't expect an increase in share price...they've been in a downtrend since 2005.

[Whidbey]

It does not matter who is president since the task is beyond a human being. I like the dividends because they are nontaxable if held, or acquired in a Roth IRA. Be creative, the government does not want to support SS, so they will allow more freedom to the self-help crowd. I am not totally despondent but nearly so.