Latest news with #VanguardDividendAppreciationETF
Yahoo
a day ago
- Business
- Yahoo
This Red-Hot Vanguard ETF Just Hit an All-Time High. Here's Why It's Still Worth Buying in August.
Key Points The Vanguard Dividend Appreciation ETF is hovering around an all-time high due to the strong performance of megacap stocks. Unlike some income-oriented ETFs, the Vanguard Dividend Appreciation ETF has considerable exposure to growth-focused sectors like technology. Many companies outside the ten largest holdings in the ETF have high dividend yields and multi-decade track records of boosting their payouts. 10 stocks we like better than Vanguard Dividend Appreciation ETF › Exchange-traded funds (ETFs) are a way to invest in dozens, hundreds, or even thousands of stocks under a single ticker. Some ETFs track indexes, while others target themes, such as growth stocks, value stocks, or passive income. The Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) is unique because it accomplishes several investment objectives -- from holding positions in top growth stocks to being a decent vehicle for collecting passive income. Here's why the ETF is still worth buying in August, even though it's at an all-time high. Not your typical list of top dividend stocks Instead of focusing solely on dividend yield, the Dividend Appreciation ETF targets companies that are growing their earnings and can support future dividend raises. Company Percentage of Fund Dividend Yield Broadcom (NASDAQ: AVGO) 6.1% 0.7% Microsoft 5.2% 0.6% JPMorgan Chase 4.1% 1.8% Apple 3.4% 0.4% Eli Lilly 2.9% 0.8% Visa 2.7% 0.7% ExxonMobil 2.4% 3.7% Mastercard 2.3% 0.6% Costco Wholesale 2.0% 0.5% Walmart 2.1% 0.9% Data sources: Vanguard, YCharts. As you can see in the table, eight of the 10 largest holdings in the ETF have yields under 1%. However, the lineup features industry leaders across a variety of sectors -- including technology, financials, consumer staples, healthcare, and energy. Funds that pursue higher-yielding stocks tend to be overweight low-growth sectors and underweight growth-focused sectors -- like tech. But because the Vanguard Dividend Appreciation ETF prioritizes companies that can support a growing dividend with higher earnings, it can include tech giants like Broadcom, Apple, and Microsoft. Broadcom and Apple have increased their dividends for 14 consecutive years, and Microsoft has a 15-year streak. These stocks sport low yields not because they haven't been boosting their payouts, but because their stock prices have gone up by so much. In this vein, the Dividend Appreciation ETF doesn't penalize companies for having low yields because they have been winning investments. A higher yield and lower valuation than the S&P 500 Many of the largest holdings in the ETF sport low yields. But the top 10 holdings only make up 32.6% of the ETF. Just outside of the top 10, holdings 11 through 20 are Procter & Gamble, Johnson & Johnson, Home Depot, Oracle, AbbVie, Bank of America, UnitedHealth Group, Cisco Systems, Coca-Cola, and International Business Machines. Combined, these names make up 15.8% of the fund. However, many of these names have higher yields and extensive track records of boosting their payouts. Because a sizable chunk of the larger holdings in the Vanguard Dividend Appreciation ETF are blue chip stocks with higher yields and reasonable valuations, the fund sports a relatively attractive valuation and dividend yield compared to the S&P 500. In fact, the price-to-earnings (P/E) ratio of the Vanguard Dividend Appreciation ETF is 25.7 and its yield is 1.7% compared to the Vanguard S&P 500 ETF (NYSEMKT: VOO) -- which has a 27.8 P/E and a 1.2% yield. A balanced fund you can confidently buy and hold Buying stocks or ETFs at all-time highs seems counterintuitive. After all, who wants to pay a record price for something? However, the Vanguard Dividend Appreciation ETF could appeal to investors who are looking to put capital to work in the market without betting big on companies with lofty valuations. The ETF's emphasis on dividend quality over quantity will appeal to long-term investors who want to make sure they aren't achieving a high yield just by investing in mediocre companies. The fund could be an especially good pick for folks who don't want to collect passive income at the expense of limiting their exposure to tech stocks. Nvidia has been the poster child of artificial intelligence investor excitement, but Broadcom, the largest holding in the Vanguard Dividend Appreciation ETF, has been no slouch -- with a staggering 474% gain in just three years. All told, the ETF is a great way to balance exposure to megacap growth stocks and blue chip dividend-paying value stocks -- which could make the fund a better buy for certain investors than the Vanguard S&P 500 ETF. Should you buy stock in Vanguard Dividend Appreciation ETF right now? Before you buy stock in Vanguard Dividend Appreciation ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Dividend Appreciation 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 $663,630!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,115,695!* Now, it's worth noting Stock Advisor's total average return is 1,071% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 13, 2025 Bank of America is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Daniel Foelber has positions in Nvidia and Procter & Gamble. The Motley Fool has positions in and recommends AbbVie, Apple, Cisco Systems, Costco Wholesale, Home Depot, International Business Machines, JPMorgan Chase, Mastercard, Microsoft, Nvidia, Oracle, Vanguard Dividend Appreciation ETF, Vanguard S&P 500 ETF, Visa, and Walmart. The Motley Fool recommends Broadcom, Johnson & Johnson, and UnitedHealth Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. This Red-Hot Vanguard ETF Just Hit an All-Time High. Here's Why It's Still Worth Buying in August. was originally published by The Motley Fool
Yahoo
11-08-2025
- Business
- Yahoo
Could Buying the Vanguard Dividend Appreciation ETF Today Set You Up for Life?
Key Points The Vanguard Dividend Appreciation ETF largely uses dividends as a screening tool, not as a way to identify income opportunities. The exchange-traded fund specifically avoids the highest-yielding stocks. If you have a long time horizon, the Vanguard Dividend Appreciation ETF could be a solid choice for your portfolio. 10 stocks we like better than Vanguard Dividend Appreciation ETF › The Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) has a name that might confuse some investors. It includes the word "dividend," which makes it seem like it could be an income-focused exchange traded fund (ETF). But it also includes the word "appreciation," which suggests something entirely different. In the end, something entirely different is what you get -- but that's not necessarily bad if you have a lifetime of investing ahead of you. Here's what you need to know. What does the Vanguard Dividend Appreciation ETF do? As far as exchange-traded funds go, the Vanguard Dividend Appreciation ETF is fairly simple to understand. It tracks the S&P U.S. Dividend Growers Index. That index starts by only looking at the companies that have increased their dividends for at least 10 years. It then eliminates the highest-yielding 25% of the stocks and buys the rest using a market cap weighting methodology. Thinking the selection process through highlights a few key factors. First, this is not an income-focused ETF, since it specifically removes the highest-yielding choices from the mix. But that makes sense, too, since the highest-yielding stocks are also likely to be the ones facing financial difficulty or the ones that tend to be slow-growing. Second, by biasing the ETF toward the lowest-yielding stocks, the Vanguard Dividend Appreciation ETF is likely going to be focused on companies with more of a growth flare. Indeed, the fastest-growing companies often have the lowest yields, even though they may also have the fastest-growing dividends. Third, the Vanguard Dividend Appreciation ETF is a growth ETF that uses dividends to screen for stocks. After all, getting to a decade of dividend hikes is a pretty impressive feat. This simple bar likely eliminates a lot of lower-quality investment options even before the highest-yielding 25% of the eventual candidates gets tossed out. What are you really getting with the Vanguard Dividend Appreciation ETF? As the chart above highlights, the Vanguard Dividend Appreciation ETF is delivering a generally growing dividend over time. And it is delivering a generally rising share price. So it offers income growth and capital appreciation. That's not a bad combination, especially if you are still fairly young and have a long time before you will need to tap your nest egg. Indeed, if you start early enough and hold on long enough, the dividend growth here could actually end up providing you with a fairly substantial income stream in the future. You are also getting an easy-to-understand investment, since the index the Vanguard Dividend Appreciation ETF tracks is far from being complex. The cost is also easy to appreciate, given the expense ratio is a modest 0.05%. Essentially, the ETF isn't doing a lot of heavy lifting in the stock selection process, but you aren't paying a lot, either. What you definitely aren't getting here, however, is a huge income stream today. The ETF's dividend yield is around 1.7%. That's higher than the 1.2% you'd collect from an S&P 500 index (SNPINDEX: ^GSPC) clone. But if you are looking to maximize the income you generate from your portfolio right now, well, there are far better choices out there. This highlights that the word "appreciation" is far more important with this ETF than the word "dividend." The Vanguard Dividend Appreciation ETF does what it sets out to do All in, if you are looking to maximize the income you generate today, buying the Vanguard Dividend Appreciation ETF will set you up to be disappointed. However, if you have a long time horizon, the mix of capital appreciation and dividend growth here could set you up for a solid outcome when you eventually retire. Should you buy stock in Vanguard Dividend Appreciation ETF right now? Before you buy stock in Vanguard Dividend Appreciation ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Dividend Appreciation 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 $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,119,863!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Dividend Appreciation ETF. The Motley Fool has a disclosure policy. Could Buying the Vanguard Dividend Appreciation ETF Today Set You Up for Life? 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
24-07-2025
- Business
- Yahoo
2 Vanguard ETFs That Can Turn $400 per Month Into Over $1.7 Million
Key Points The Vanguard S&P 500 ETF provides investors with exposure to the world's largest companies across every major industry sector. The Vanguard Dividend Appreciation ETF complements growth-oriented investments with a mix of value stocks and reliable dividend income. Both of these funds offer inexpensive management fees and can help turn small monthly contributions into millions over a long-term time horizon. 10 stocks we like better than Vanguard S&P 500 ETF › A common misconception about creating wealth is that you need to be an expert stock picker. While investing in individual companies can indeed generate significant savings, there are many other ways an investor can benefit from the appreciation of the stock market. One such way is through exchange-traded funds (ETFs). ETFs represent a basket of stocks and provide investors with passive exposure to specific industries or themes. Below, I'll detail two Vanguard ETFs that can help investors become millionaires while barely lifting a finger. 1. Vanguard S&P 500 ETF While Warren Buffett is primarily known for his successful stock picking abilities, the famous investor often expresses that most investors should simply buy into the S&P 500 index. While this sounds nice in theory, how can you actually do that? Well, the Vanguard S&P 500 ETF (NYSEMKT: VOO) has you covered. This fund provides investors with passive exposure to the companies that comprise the S&P 500. Not only does this help investors achieve a high degree of diversification, but it also mitigates downside risk as industries respond to news and economic shifts in different ways. One thing that makes this Vanguard ETF different than other S&P 500-themed funds is that it is weighted by market cap. This means that the companies with the largest market caps -- such as Nvidia, Microsoft, Apple, Berkshire Hathaway, or Eli Lilly -- have more of an influence on the fund's price movements relative to smaller companies. Per the graph above, the Vanguard S&P 500 ETF has generated a total return of 647% since its inception in 2010. This equates to 14.5% annually. Assuming these returns keep up, a $200 monthly investment can grow significantly over the course of a long-term time horizon. Timeline Long-Term Savings 10 Years $53,400 20 Years $279,078 30 Years $1,232,848 Calculations by author via 2. Vanguard Dividend Appreciation ETF The Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) is made up of companies that have increased their dividend payments over 10 years or more. This is important to understand, as inclusion in the index isn't guaranteed simply by offering a juicy dividend yield. Instead, members of the VIG index are companies that have proven to sustain their dividend payments while having the financial flexibility to increase them over time. I see this fund as a great complement to VOO since it offers a unique mix of growth and value stocks that serve as reliable sources of dividend income such as Visa, Broadcom, and Walmart. The fund's annual return since inception hovers right around 10%, which is slightly better than the long-run average return of the S&P 500 index. Assuming these returns keep up, a $200 monthly contribution can grow to roughly $450,000 over the course of 30 years. Keep these ideas in mind An important factor to consider when choosing an ETF is the expense ratio. With expense ratios of 0.03% and 0.05% for VOO and VIG, respectively, investors are paying less than $1 per $1,000 invested. While VOO and VIG can help make you a millionaire, it's important that investors consistently contribute to their positions on a frequent basis. Moreover, it's equally important to remember that building a seven-figure savings can take decades. The more important idea explored in this piece is that building wealth takes time, discipline, and patience. All told, I see both of these Vanguard funds as low-cost and low-effort ways to generate significant wealth. Should you invest $1,000 in Vanguard S&P 500 ETF right now? Before you buy stock in Vanguard S&P 500 ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard S&P 500 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 $665,092!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,050,477!* Now, it's worth noting Stock Advisor's total average return is 1,055% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Adam Spatacco has positions in Apple, Eli Lilly, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, Microsoft, Nvidia, Vanguard Dividend Appreciation ETF, Vanguard S&P 500 ETF, Visa, and Walmart. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. 2 Vanguard ETFs That Can Turn $400 per Month Into Over $1.7 Million 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
05-07-2025
- Business
- Yahoo
2 Dividend ETFs to Buy With $500 and Hold Forever
Dividend investors generally fall into two broad categories, seeking either dividend growth or high yield. The Vanguard Dividend Appreciation ETF will appeal to dividend growth investors. The Schwab U.S. Dividend Equity ETF is for those seeking a high yield. 10 stocks we like better than Vanguard Dividend Appreciation ETF › If you have $500 to invest and love dividends, you have plenty of stocks to choose from. But $500 won't necessarily get you a diversified portfolio of individual stocks. For that sum, you may be better off buying an exchange-traded fund (ETF) that prioritizes dividend income. Two of the best options for buy-and-hold investors today are the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) and the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). Each one appeals to a different kind of income investor. Most dividend investors look first at a stock's yield, but another important factor is the growth potential of the dividend over time. This is exactly the focus of the Vanguard Dividend Appreciation ETF. While the ETF's yield is only around 1.8% as of this writing, the quarterly dividend has nearly doubled over the past decade, and that payout growth has been accompanied by a roughly 170% increase in the share price of the ETF. To achieve this result, the ETF follows the S&P U.S. Dividend Growers index, which looks at all U.S. companies that have increased their dividends for a decade or longer. The index then removes the highest yielding 25% of the list. What's left is included in the index -- and the ETF -- weighted by market cap. The expense ratio is a very low 0.05%. While the yield today may not excite you, that's not what the Vanguard Dividend Appreciation ETF is trying to do. It is attempting to provide you with growth of capital and income. With $500, you can buy two shares of the ETF, which will start you along an investment journey that can lead to a very attractive retirement portfolio years from now. If you don't have that much time before you retire and would like to generate a little more income in the here and now, then the Schwab U.S. Dividend Equity ETF might be a better choice. It is offering a nearly 4% yield as of this writing and also comes with a modest expense ratio of 0.06%. But the big question is: What backs the yield? The Schwab U.S. Dividend Equity ETF tracks the Dow Jones U.S. Dividend 100 index. Its construction is a lot more complex than the index backing the Vanguard ETF. But in essence, the Dow Jones U.S. Dividend 100 index follows some of the core criteria you would likely follow if shopping for individual stocks. Specifically, the index screens for companies that have increased their dividends for a decade or more (excluding real estate investment trusts). A composite score is created for the qualifying companies that looks at the ratio of cash flow to total debt, return on equity, dividend yield, and the company's five-year dividend growth rate. The 100 companies with the highest composite scores are included in the index and the ETF (again weighted by market cap). The outcome of this has been a rising dividend, rising share price, and a generous yield. In fact, the dividend here has grown more quickly than that of the Vanguard Dividend Appreciation ETF over the past decade, but the price gain has been smaller. A $500 investment will get you around 18 shares of the Schwab U.S. Dividend Equity ETF. A lot of exchange-traded funds throw the word "dividend" into their names, but they are not all created equal. If you have more time on your side, the Vanguard Dividend Appreciation ETF is the kind of investment with which you can build long-term wealth. If you are more focused on generating income right now, you may prefer the Schwab U.S. Dividend Equity ETF. That said, both of these dividend ETFs stand out from the pack as buy-and-hold choices for those whose investment time frame is "forever." Before you buy stock in Vanguard Dividend Appreciation ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Dividend Appreciation 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 $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $976,677!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 180% 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 30, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Dividend Appreciation ETF. The Motley Fool has a disclosure policy. 2 Dividend ETFs to Buy With $500 and Hold Forever was originally published by The Motley Fool
Yahoo
05-07-2025
- Business
- Yahoo
2 Dividend ETFs to Buy With $500 and Hold Forever
Dividend investors generally fall into two broad categories, seeking either dividend growth or high yield. The Vanguard Dividend Appreciation ETF will appeal to dividend growth investors. The Schwab U.S. Dividend Equity ETF is for those seeking a high yield. 10 stocks we like better than Vanguard Dividend Appreciation ETF › If you have $500 to invest and love dividends, you have plenty of stocks to choose from. But $500 won't necessarily get you a diversified portfolio of individual stocks. For that sum, you may be better off buying an exchange-traded fund (ETF) that prioritizes dividend income. Two of the best options for buy-and-hold investors today are the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) and the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). Each one appeals to a different kind of income investor. Most dividend investors look first at a stock's yield, but another important factor is the growth potential of the dividend over time. This is exactly the focus of the Vanguard Dividend Appreciation ETF. While the ETF's yield is only around 1.8% as of this writing, the quarterly dividend has nearly doubled over the past decade, and that payout growth has been accompanied by a roughly 170% increase in the share price of the ETF. To achieve this result, the ETF follows the S&P U.S. Dividend Growers index, which looks at all U.S. companies that have increased their dividends for a decade or longer. The index then removes the highest yielding 25% of the list. What's left is included in the index -- and the ETF -- weighted by market cap. The expense ratio is a very low 0.05%. While the yield today may not excite you, that's not what the Vanguard Dividend Appreciation ETF is trying to do. It is attempting to provide you with growth of capital and income. With $500, you can buy two shares of the ETF, which will start you along an investment journey that can lead to a very attractive retirement portfolio years from now. If you don't have that much time before you retire and would like to generate a little more income in the here and now, then the Schwab U.S. Dividend Equity ETF might be a better choice. It is offering a nearly 4% yield as of this writing and also comes with a modest expense ratio of 0.06%. But the big question is: What backs the yield? The Schwab U.S. Dividend Equity ETF tracks the Dow Jones U.S. Dividend 100 index. Its construction is a lot more complex than the index backing the Vanguard ETF. But in essence, the Dow Jones U.S. Dividend 100 index follows some of the core criteria you would likely follow if shopping for individual stocks. Specifically, the index screens for companies that have increased their dividends for a decade or more (excluding real estate investment trusts). A composite score is created for the qualifying companies that looks at the ratio of cash flow to total debt, return on equity, dividend yield, and the company's five-year dividend growth rate. The 100 companies with the highest composite scores are included in the index and the ETF (again weighted by market cap). The outcome of this has been a rising dividend, rising share price, and a generous yield. In fact, the dividend here has grown more quickly than that of the Vanguard Dividend Appreciation ETF over the past decade, but the price gain has been smaller. A $500 investment will get you around 18 shares of the Schwab U.S. Dividend Equity ETF. A lot of exchange-traded funds throw the word "dividend" into their names, but they are not all created equal. If you have more time on your side, the Vanguard Dividend Appreciation ETF is the kind of investment with which you can build long-term wealth. If you are more focused on generating income right now, you may prefer the Schwab U.S. Dividend Equity ETF. That said, both of these dividend ETFs stand out from the pack as buy-and-hold choices for those whose investment time frame is "forever." Before you buy stock in Vanguard Dividend Appreciation ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Dividend Appreciation 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 $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $976,677!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 180% 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 30, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Dividend Appreciation ETF. The Motley Fool has a disclosure policy. 2 Dividend ETFs to Buy With $500 and Hold Forever 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
