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A Simple 3 ETF Combo For A Complete Diversified Dividend Portfolio

Published Thu, 20 Sep 2018 20:27:43 -0400 on Seeking Alpha

If you're an investor looking to build a dividend-producing portfolio using ETFs, you'll be happy to know that you have a lot of great options to choose from. There are dozens of 5-star Morningstar-rated dividend ETFs not just from the likes of Vanguard, Schwab (NYSE: SCHW) and BlackRock (NYSE: BLK), but also smaller ETF issuers, such as Invesco, FlexShares and WisdomTree. Better yet, the never-ending fee war in the ETF industry means you can own some of these fantastic funds for as little as 0.10% annually or less.
But constructing a well-rounded dividend ETF portfolio isn't as simple as just picking the funds with the highest ratings or historical returns. Different ETFs employ different strategies for targeting dividends, so it's important to hold a mix of these strategies in order to diversify your coverage. I suggest that investors take a three-pronged approach to create a dividend ETF portfolio. By that, I mean including funds that focus on three distinct strategies - dividend growth, dividend quality and high yield.
Dividend growth is pretty easily definable and includes targeting companies with long histories of paying and growing their dividends, such as the Dividend Aristocrats. Dividend quality can take on several appearances, but it generally focuses on companies whose dividends are sustainable and supported by balance sheet strength. This is generally defined by strong cash flows, high returns on equity, manageable payout ratios and profitability.... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
VANGUARD HIGH DIVIDEND YIELD ETF 84.10   0.0 0.00 0.00 3.18


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