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Yahoo
4 days ago
- Business
- Yahoo
4 Top Dividend ETFs Yielding Over 4% to Buy for Easy Passive Income
The Schwab U.S. Dividend Equity ETF and Pacer Global Cash Cows Dividend ETF have yields above 4%. The JPMorgan Equity Premium Income ETF uses options to generate passive income. The iShares Preferred and Income Securities ETF holds bond-like income securities. 10 stocks we like better than Schwab U.S. Dividend Equity ETF › Exchange-traded funds (ETFs) make investing easy. These managed funds come with built-in diversification. Because of that, you can buy an ETF and sit back and let it do all the work. Many ETFs hold income-generating investments, making them ideal for those seeking passive income. Here are four top dividend ETFs yielding at least 4% to buy and hold for easy passive income. The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) tracks an index (Dow Jones U.S. Dividend 100 Index) focused on companies that pay quality and sustainable dividends. It targets higher-yielding dividend stocks that have grown their payouts at healthy rates over the past five years, which seem likely to continue. The Schwab U.S. Dividend Equity ETF has a distribution yield of slightly more than 4% based on its payments over the last 12 months. Given the fund's emphasis on holding dividend growers, it has delivered a steadily rising income stream to its investors over the years: While that past performance doesn't guarantee future success, the fund's focus on high-quality companies that grow their dividends bodes well for its ability to continue paying a steadily rising income stream. The iShares Preferred and Income Securities ETF (NASDAQ: PFF) tracks an index that holds preferred and hybrid securities. These investments are like a combination of bonds (they pay fixed income) and stocks (they represent an ownership interest). They tend to be riskier than bonds but have a lower risk profile than stocks. The fund currently holds 443 securities, primarily issued by financial institutions (70.2% of its holdings), industrial companies (18.2%), and utilities (10.2%). The ETF has a 6.6% yield based on payments over the last 12 months. That's on par with a high-yield bond fund. In addition to that high yield, which can fluctuate from month to month, the fund offers some potential for price appreciation. For example, a $10,000 investment made at the fund's inception in 2007 would be worth over $20,000 today. The JPMorgan Equity Premium ETF (NYSEMKT: JEPI) aims to distribute income to investors each month while also providing them with less volatile exposure to the equity market. The JPMorgan Equity Premium ETF has a two-fold investment strategy designed to achieve that goal: Defensive equity portfolio: The fund holds a portfolio of stocks selected based on its proprietary, risk-adjusted stock rankings to provide exposure to the market. Discipline options overlay strategy: The ETF's managers write out-of-the-money (above the current level) call options on the S&P 500 Index. By writing (or shorting) these options, it gets paid the options premium (value of the option). The strategy generates income that the fund can distribute to investors each month. The fund's strategy is very lucrative: As that chart shows, it has delivered a higher income yield than U.S. high-yield bonds (junk bonds) over the past 12 months. In addition to that lucrative passive-income stream, the fund can also deliver some price-appreciation potential from its stock portfolio. The Pacer Global Cash Cows Dividend ETF (NYSEMKT: GCOW) focuses on companies that generate lots of free cash flow. That enables these cash cows to pay lucrative dividends. The strategy-driven ETF aims to identify companies that can continue to pay attractive dividends by screening for them based on their free-cash-flow yield and dividend yield. The fund holds the top 100 companies with the highest free-cash-flow yield and highest dividend yield. It weighs them by their dividends, capping the top holding at 2% of the fund's assets. It reconstitutes and rebalances its holdings twice each year to ensure it holds the 100 top cash cow dividend stocks. The average holding in the fund has a 6.3% free-cash-flow yield and a 4.7% dividend yield. However, after expenses (the fund has a 0.6% ETF expense ratio), its annualized dividend yield is closer to 4.2%. While the fund's strategy aims to identify companies in a better position to maintain and grow their dividends, there's no guarantee that will happen, as fund payments can fluctuate, sometimes significantly, based on dividends received by the companies it holds. ETFs make it super easy to generate passive income. Many ETFs focus on holding income-producing investments, giving investors lots of options. The Schwab U.S. Dividend Equity ETF, iShares Preferred and Income Securities ETF, JPMorgan Equity Premium Income ETF, and Pacer Global Cash Cows Dividend ETF stand out for their attractive yields and potential for income growth. Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $656,825!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $865,550!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Matt DiLallo has positions in JPMorgan Equity Premium Income ETF and Schwab U.S. Dividend Equity ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 4 Top Dividend ETFs Yielding Over 4% to Buy for Easy Passive Income was originally published by The Motley Fool
Yahoo
29-05-2025
- Business
- Yahoo
Got $10,000 to Invest? This High-Yield Dividend ETF Can Effortlessly Turn It Into More than $400 of Annual Passive Income.
The Pacer Global Cash Cows Dividend ETF focuses on companies that produce a lot of cash. These cash cows have a greater capacity to sustain and grow their high-yielding dividends. The fund currently has a yield of more than 4%, making it an ideal way to generate passive income. 10 stocks we like better than Pacer Funds Trust - Pacer Global Cash Cows Dividend ETF › Making money usually requires a lot of effort. You have to actively work at a job. Even passive income sources often require hands-on activity, like managing a rental property or a portfolio of dividend stocks. However, some income options are effortless. Investing in dividend ETFs is one of the easiest ways to generate passive income. These managed funds typically hold a diverse pool of income-generating assets, making them a simple way to collect passive income. One ideal dividend ETF for passive income is the Pacer Global Cash Cows Dividend ETF (NYSEMKT: GCOW). It can turn a $10,000 investment into more than $400 of annual dividend income at its recent dividend rate of more than 4%. You don't need that much to get started. Every $100 invested in the fund would produce over $4 of dividend income each year. Here's a closer look at this income-focused fund. The Pacer Global Cash Cows Dividend ETF is a strategy-driven fund. It aims to unearth companies that can pay consistent dividends because they generate lots of free cash flow. It screens companies by their free cash flow yield and dividend yield. The fund hunts for dividend stocks among the world's 1,000 largest companies. It screens these companies and pulls out the top 300 based on their free cash flow yields. It then screens those stocks by their dividend yields. The ETF takes the top 100 companies by dividend yield, weighting them in the fund by their yield, capped at 2%. It rebalances and reconstitutes its holdings twice each year. At its last refresh in December, the fund's holdings had an average free cash flow yield of 6.3% and a dividend yield of 5%. The dividend yield was closer to 4% based on the fund's last annualized payment and recent share price. Many dividend ETFs focus on companies based on their dividend yields or histories. The Pacer Global Cash Cows Dividend ETF focuses on the fuel that funds dividends: free cash flow. Free cash flow, which is the cash a company produces after expenses, interest, taxes, and long-term investments, is the source of dividend payments (and share repurchases). It screens companies based on their free cash flow yield, which is their free cash flow per share divided by the share price. Having a high free cash flow yield indicates two things. First, it means that the company produces a lot of cash, giving it a high capacity to pay dividends. It also implies that the company has a lower valuation. While a company with a high dividend yield can imply a high dividend payout ratio, having a high free cash flow yield and a high dividend yield indicates that the stock trades at a lower valuation and should be able to sustain its dividend. Investing in companies that produce a lot of cash, also known as cash cows, has other benefits. They tend to deliver long-term capital appreciation because they trade at a lower valuation, giving them more potential for valuation expansion. These stocks also tend to be less volatile, which can help cushion the blow during market downturns. Meanwhile, the higher dividend yields provide investors with more dividend income, which is a tangible return. Since its formation in 2016, the fund has produced an 8.8% annualized total return. At that rate, the fund would have grown a $10,000 investment made at its inception into nearly $23,000 (assuming reinvested dividends). While other investments have produced higher returns, this fund has produced a solid return (which includes meaningful dividend income) with less volatility than other investments. That makes it ideal for those seeking a lower-risk, income-focused investment. The Pacer Global Cash Cows Dividend ETF focuses on companies that produce a lot of cash because that enables them to pay attractive dividends. It zeros in on companies with higher free cash flow yields and high dividend yields. Because the fund managers do all the work, it's an effortless way to collect passive income. Before you buy stock in Pacer Funds Trust - Pacer Global Cash Cows Dividend ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Pacer Funds Trust - Pacer Global Cash Cows Dividend ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor's total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Got $10,000 to Invest? This High-Yield Dividend ETF Can Effortlessly Turn It Into More than $400 of Annual Passive Income. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17-04-2025
- Business
- Yahoo
2 High-Yielding ETFs Retirees Can Safely Build Their Portfolios Around
Are you a retiree who's worried about the stock market? Now can be a concerning time to buy stocks, given the volatility. Where the economy is headed and what the tariff situation will look like over the next year or two are anyone's guess at this point. But the good news is that there are safe options to consider that can allow you to remain invested in the market and simply stick to solid, blue-chip stocks. Exchange-traded funds (ETFs) can help you diversify, collect dividends, and keep your overall risk low. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » A couple of ETFs that may be attractive options for retirees are Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) and Pacer Global Cash Cows Dividend ETF (NYSEMKT: GCOW). Here's a closer look at why these might be investments worth adding to your portfolio today. The Schwab fund pays a dividend that yields 3.7% at recent prices, which is an attractive payout when you consider the S&P 500 yields 1.5%. You're getting a whole lot more bang for your buck with this ETF than simply trying to mirror the market. And you're not having to spend a whole lot for that dividend either; Schwab's expense ratio is just 0.06%. The ETF is able to offer a high payout by focusing on stocks with above-average payouts. It also isn't overly diversified -- there are around 100 holdings in the fund today. Verizon Communications, Altria Group, and Coca-Cola are among its top 10 holdings. That mix also offers a glimpse into the fund's diversification. It isn't heavily exposed to tech stocks; instead, financials account for the bulk of its portfolio (19%), followed by healthcare stocks (17%), consumer staples (14%), and industrials (13%). The tech sector makes up a fairly modest 9% of the Schwab portfolio, which is important for retirees who want to keep their risk low given the volatility that comes with those types of stocks. While the Schwab ETF may not be entirely immune from the effects of a downturn in the markets, with its focus on blue-chip stocks and dividends, it can help minimize the impact on your portfolio should there be another steep sell-off in the markets. Retirees can collect a slightly higher yield by going with the Pacer Global Cash Cows Dividend ETF, which yields 3.9% at recent prices. It also holds around 100 stocks, focusing on companies with high free cash flow yields. The ETF does come with a higher expense ratio of 0.60%, but that may be justifiable given the higher overall yield and the safety that comes with it. Some of the notable stocks among Pacer's top holdings are Nestle, Phillip Morris International, and Gilead Sciences. These are all fairly high-yielding stocks that pay around 3% or higher, with stable and robust businesses to support their generous payouts. Tech makes up an even smaller position in Pacer's portfolio compared to the Schwab fund. Here, tech stocks account for less than 1% of the ETF's total holdings. Energy (19%), healthcare (18%), and consumer staples (17%) make up the bulk of the fund. And those are all sectors that should provide investors with exposure to relatively stable businesses. For retirees, either one of these funds can make for a good place to park your money right now. You may even want to hold both of them in your portfolio to further diversify your holdings. Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $526,499!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $687,684!* Now, it's worth noting Stock Advisor's total average return is 818% — a market-crushing outperformance compared to 156% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 14, 2025 David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Gilead Sciences. The Motley Fool recommends Nestlé, Philip Morris International, and Verizon Communications. The Motley Fool has a disclosure policy. 2 High-Yielding ETFs Retirees Can Safely Build Their Portfolios Around was originally published by The Motley Fool
