10 High Dividend ETFs and how to invest in them

Dividends are one of the ways to build passive income. In the stock market, there are stocks that offer dividends as well as ETFs. Dividend ETFs are like mutual funds, in that they represent a basket of Stocks. However ETFs could be traded during the day as well providing more liquidity. More information about the differences between ETFs and Mutual Funds can be found here.

How to invest in High Dividend ETFs

The key things to consider while investing in Dividend ETFs are their expense ratio and dividend yield. They are the fees funds charge for managing. The lower the expense ratio, the better. Also watch out for the dividend yield as that is what you are targeting for. The 5 years performance indicates the asset allocation strategy and a good performance reflects the strength of the stocks in the ETF.

The investment strategy should be to hold these ETFs forever and live off the dividend income. If you do not need the income right away, you could choose to reinvest those dividends. This means when the dividend is issued, the broker automatically purchases additional shares of the ETF for you. This results in the compounding of your principal and you will have a sizable nest egg when you need the income.

High Dividend ETFs

Schwab U.S. Dividend Equity ETF (SCHD)

Assets Under Management: $12.67B
Total Holdings: 102
Price / Earnings Ratio: 16.07
Price / Book Ratio: 2.44

Total Top 10 Weighting: 42.41%

1. United Parcel Service, Inc. Class B
2. QUALCOMM Incorporated
3. Texas Instruments Incorporated
4. BlackRock, Inc.
5. Pfizer Inc.
6. Altria Group Inc.
7. PepsiCo, Inc.
8. Verizon Communications Inc.
9. 3M Company
10. Coca-Cola Company

Vanguard High Dividend Yield ETF (VYM)

Assets Under Management: $27.04B
Total Holdings: 429
Price / Earnings Ratio: 18.99
Price / Book Ratio: 2.13

Total Top 10 Weighting: 24.93%

1. Johnson & Johnson
2. Procter & Gamble Company
3. JPMorgan Chase & Co
4. Verizon Communications Inc.
5. Pfizer Inc.
6. AT&T Inc.
7. Merck & Co., Inc.
8. Intel Corporation
9. Cisco Systems, Inc.
10. Comcast Corporation Class A

iShares Core High Dividend ETF (HDV)

Assets Under Management: $5.64B
Total Holdings: 77
Price / Earnings Ratio: 23.64
Price / Book Ratio: 2.22

Total Top 10 Weighting: 59.07%

1. AT&T Inc.
2. Exxon Mobil Corporation
3. Johnson & Johnson
4. Verizon Communications Inc.
5. Pfizer Inc.
6. Chevron Corporation
7. Merck & Co., Inc.
8. Coca-Cola Company
9. PepsiCo, Inc.
10. Cisco Systems, Inc.

SPDR S&P Dividend ETF (SDY)

Assets Under Management: $15.75B
Total Holdings: 118
Price / Earnings Ratio: 20.64
Price / Book Ratio: 2.10

Total Top 10 Weighting: 17.78%

1. Exxon Mobil Corporation
2. AT&T Inc.
3. National Retail Properties, Inc.
4. Chevron Corporation
5. People’s United Financial, Inc.
6. Federal Realty Investment Trust
7. International Business Machines Corporation
8. Franklin Resources, Inc.
9. Leggett & Platt, Incorporated
10. Realty Income Corporation

WisdomTree U.S. High Dividend Fund (DHS)

Assets Under Management: $729.89M
Total Holdings: 298
Price / Earnings Ratio: 18.13
Price / Book Ratio: 2.12

Total Top 10 Weighting: 41.96%

1. Pfizer Inc.
2. Verizon Communications Inc.
3. AbbVie, Inc.
4. AT&T Inc.
5. International Business Machines Corporation
6. Philip Morris International Inc.
7. Chevron Corporation
8. Bristol-Myers Squibb Company
9. Coca-Cola Company
10. QUALCOMM Incorporated

Invesco S&P Ultra Dividend Revenue ETF (RDIV)

Assets Under Management: $618.38M
Total Holdings: 61
Price / Earnings Ratio: 30.38
Price / Book Ratio: 1.07

Total Top 10 Weighting: 49.04%

1. Dow Inc.
2. Prudential Finance, Inc.
3. LyondellBasell Industries NV
4. MetLife, Inc.
5. International Business Machines Corporation
6. Chevron Corporation
7. Valero Energy Corporation
8. Phillips 66
9. Wells Fargo & Company
10. Marathon Petroleum Corporation

iShares Select Dividend ETF (DVY)

Assets Under Management: $13.02B
Total Holdings: 102
Price / Earnings Ratio: 15.94
Price / Book Ratio: 1.41

Total Top 10 Weighting: 19.73%

1. Altria Group Inc.
2. Prudential Finance, Inc.
3. Philip Morris International Inc.
4. Wells Fargo & Company
5. AT&T Inc.
6. Exxon Mobil Corporation
7. LyondellBasell Industries NV
8. Marathon Petroleum Corporation
9. PPL Corporation
10. International Paper Company

First Trust Morningstar Dividend Leaders Index Fund (FDL)

Assets Under Management: $1.33B
Total Holdings: 100
Price / Earnings Ratio: 13.76
Price / Book Ratio: 1.84

Total Top 10 Weighting: 19.73%

1. AT&T Inc.
2. Verizon Communications Inc.
3. Pfizer Inc.
4. AbbVie, Inc.
5. Philip Morris International Inc.
6. Altria Group Inc.
7. Broadcom Inc.
8. International Business Machines Corporation
9. United Parcel Service, Inc. Class B
10. Citigroup Inc.

Invesco High Yield Equity Dividend Achievers ETF (PEY)

Assets Under Management: $648.83M
Total Holdings: 52
Price / Earnings Ratio: 24.10
Price / Book Ratio: 1.25

Total Top 10 Weighting: 29.24%

1. Avista Corporation
2. UGI Corporation
3. Altria Group Inc.
4. Unum Group
5. Ryder System, Inc.
6. Lazard Ltd Class A
7. Comerica Incorporated
8. ONEOK, Inc.
9. Prudential Financial, Inc.
10. Universal Corp

First Trust Value Line Dividend Index Fund (FVD)

Total Top 10 Weighting: 5.80%

1. Bank of Montreal
2. J.M. Smucker Company
3. Amgen Inc.
4. Starbucks Corporation
5. Toronto-Dominion Bank
6. Medtronic Plc
7. Honeywell International Inc.
8. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR
9. W.W. Grainger, Inc.
10. Canadian Imperial Bank of Commerce