Investors Eye High-Yield Dividend ETFs for Passive Income

A new report highlights the growing interest in dividend-paying ETFs, presenting options with enticing yields and long-term growth potential. These ETFs allow investors to earn passive income while also benefiting from potential stock-price appreciation.

Date: 02-11-2024

AI Rating: 7

The report emphasizes the attractiveness of dividend-paying stocks and ETFs for generating passive income. With the S&P 500 index fund recently boasting a dividend yield near 1.3%, investors may find opportunities in targeted ETFs that focus on higher-yielding dividend stocks.

Among the nine discussed ETFs, several exhibit notable recent yields:

iShares Preferred & Income Securities ETF (PFF) - Recent Yield: 6.00%
SPDR Portfolio S&P 500 High Dividend ETF (SPYD) - Recent Yield: 4.18%
Schwab U.S. Dividend Equity ETF (SCHD) - Recent Yield: 3.61%
Fidelity High Dividend ETF (FDVV) - Recent Yield: 2.87%
Vanguard High Dividend Yield ETF (VYM) - Recent Yield: 2.65%

Each of these ETFs targets companies capable of delivering regular dividends, and some showcase significant average annual returns over five and ten years. For example, the SPDR Portfolio S&P 500 High Dividend ETF has a 5-Year Avg. Annual Return of 8.67%, appealing to long-term investors.

The choice of ETFs also reflects various strategies. For instance, the iShares Preferred & Income Securities ETF provides high yields (6.00%) but typically sees limited growth in value. In contrast, the S&P 500 index fund offers lower yield (1.30%) but higher growth (16.07% over ten years), indicating a trade-off between immediate income and potential capital gains.

While this report does not provide specific data related to Earnings Per Share (EPS), Revenue Growth, Net Income, Profit Margins, Free Cash Flow (FCF), or Return on Equity (ROE), it does provide insights crucial for investors focusing on maximizing passive income and aligning their investment strategies accordingly.

Stocks: PFF SPYD SCHD FDVV VYM VOO