Published Tue, 23 Jul 2019 12:57:14 -0400 on Seeking Alpha
The Vanguard High Dividend Yield ETF (VYM) is a great dividend ETF to consider. Although it offers an average dividend yield, it is one of the cheapest ETFs around with a low expense ratio and holds one of the most diverse portfolios of dividend stocks. Furthermore, its portfolio is dominated by some of the highest-quality dividend stocks which have been rewarding investors by growing payouts for several years and are well-positioned to continue going this way in the future.
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This hasn't been a great year for some income-seeking investors as treasury yields have fallen this year on expectations of a rate cut from the Federal Reserve. In fact, the 10-year treasury yield dropped to its two-year lows of under 2% in July before recovering to 2.09% at the time of this writing. The current yield is still well below the recent peak of more than 3.2% seen in November. J.P. Morgan Chase and Wells Fargo have modeled one to three rate cuts from the Fed this year in their earnings forecasts.
The low rates have increased the appeal of high yielding dividend stocks for income-seeking investors. Growth investors may also want to get behind the dividend stocks during these times since a declining interest rate environment can push the prices of high-yielding stocks higher. This might be a great time to invest in high-quality dividend stocks that offer sustainable payouts. Those investors who don't have time to construct a dividend portfolio should consider... Read more