Dividend paying stocks are always popular with investors since about a third of S&P 500’s total returns since 1960 can be attributed to dividends.
With rising trade tensions, global growth slowdown and geopolitical uncertainties, investors have been pouring a lot of money into government bonds, driving bond yields lower. For income seeking investors, it makes more sense to look at dividend paying stocks now.
There are two popular approaches to dividend investing—dividend growth stocks and high dividend stocks. I like dividend growth stocks in particular since these are usually high quality companies with solid balance sheets and stable cash flows.
While some sectors like utilities, real estate and consumer staples offer higher dividend yields than all other sectors, sometime a high yield could be the result of decline in stock price. Investors should avoid such stocks since their dividend may be unsustainable.
The Vanguard Dividend Appreciation ETF (VIG) holds US companies that have increased their dividends for at least 10 consecutive years. Microsoft (MSFT), Visa (V) and Walmart (WMT) are its top holdings.
The SPDR S&P Dividend ETF (SDY) invests in companies that have increased dividends for at least 20 consecutive years. AT&T (T) and AbbVie (ABBV) are the top holdings.
The iShares Core Dividend Growth ETF (DGRO) holds companies that have a history of sustained dividend growth. Apple (AAPL), Microsoft and JP Morgan Chase (JPM) are among the top holdings.
To learn more about these ETFs, please watch the short video above.
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JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
AT&T Inc. (T) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
SPDR S&P Dividend ETF (SDY): ETF Research Reports
Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports
iShares Core Dividend Growth ETF (DGRO): ETF Research Reports
Walmart Inc. (WMT) : Free Stock Analysis Report
Visa Inc. (V) : Free Stock Analysis Report
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