The 2 Stocks That Show Up In All 9 Top-Rated Dividend ETFs
From a starting universe of nearly 800 stocks, only two meet the criteria of dividend growth, sustainability, quality and high yield.
Author:
Feb 25, 2021
Since I write almost exclusively about exchange-traded funds, it s natural for me to recommend top-rated ETFs for investors to add to their portfolio. Whether your goal is retirement saving, building an emergency and generating dividend income, the ETF industry very likely has you covered with a fund to fit almost any goal.
There s a large population of dividend investors who prefer stocks over ETFs to build a dividend portfolio. If that s your preferred method of building a portfolio, I think the ETF marketplace can still be very useful in helping to narrow down your list of potential stocks to target.
136 Dividend ETFs Ranked For 2021
We put every dividend ETF through a rigorous screening to identify the best of the best.
Author:
Feb 23, 2021
Dividend ETFs, at least in some allocation, belong in just about every portfolio. It may seem a bit counterintuitive in the current environment given that growth stocks and small-caps have been on a tear, while dividend funds, in general, have been laggards for the past few years.
Over the long-term, however, dividend stocks have been winners. Studies have shown that over periods of decades, stocks that pay dividends have outperformed those that haven t. On top of that, they re generally less volatile, are backed by healthier balance sheets and provide an important source of income that can help cushion some downside risk.
“VYMI goes overseas in search of dividend income and what it does is it looks at the entire equity opportunity set outside the U.S. It takes the highest-yielding half of those stocks, and it folds them into its portfolio, weighting them by their market capitalization,” said Morningstar’s Ben Johnson.
Ex-U.S. developed market dividend payers often feature larger yields than their U.S. counterparts, an assertion proven by comparing large- and mega-cap dividend stocks from familiar dividend sectors such as consumer staples, energy, financial services and telecommunications.
VYMI’s Steady Approach
Many foreign companies tie payouts to earnings, meaning some ex-US dividend growers also have rising profitability. Those firms aren’t burdened by dividends and can sustain payouts.
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Susan Dziubinski: Hi, I m Susan Dziubinski with Morningstar. Investors have until April 15 to make a contribution to an IRA if they want it to count toward 2020. Joining me today to discuss some ETF ideas for an IRA is Ben Johnson. Ben is Morningstar s global director of ETF research. Hi, Ben. Thanks for being here today. Ben Johnson: Thanks for having me, Susan. Dziubinski: We talk a lot about how wonderful ETFs are for taxable accounts because they tend to be in general pretty tax-efficient. So, why are we talking about them as ideas for an IRA? Johnson: You re absolutely right, Susan. The average investor, if they have a taxable account, should absolutely consider ETFs as the natural home for taxable money given that ETFs relative to most other fund formats and open-ended mutual funds in particular tend to be much more tax-efficient. They distribute few, if any, regular capital gains distributions. But that said, any dividends, any coupon payments that accrue
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