Start investing in dividend stocks can be done via dividend ETFs to accomplish differentiation and risk reduction. Alternatively, dividend investors could use the holdings of those dividend ETFs as a source for selecting individual dividend stocks. It could help you to identify candidates for further analysis and possible investment for your own portfolio.
Earlier this year, we analyzed 10 dividend ETF’s and answered the question “What is the best dividend ETF for long-term performance?”, the results can be found on the page Top-5 Best Dividend ETFs.
The top-5 at the start of 2021 contained the following dividend ETFs:
|iShares Core Dividend Growth ETF||DGRO|
|WisdomTree U.S. Dividend Growth ETF||DGRW|
|ProShares S&P 500 Dividend Aristocrats ETF||NOBL|
|Vanguard Dividend Appreciation ETF||VIG|
|Vanguard High Dividend Yield ETF||VYM|
The ETFs provide data about the top-10 holdings, including the percentage of assets under management allocated to each holding. This data is available via factsheet, Morningstar, or Yahoo Finance. See here the information on the top-10 holdings of Ishares Core Dividend Growth (DGRO).
We collected the data and compiled a spreadsheet with tickers of the top 10 holdings in each dividend ETF of our top-5. We added the holding percentages together to create a simple ranking. The most owned dividend stocks by the abovementioned ETFs are:
- Johnson & Johnson
- Procter & Gamble
- JPMorgan Chase
- Verizon communications
Below the top-30 holdings are listed including, the total percentage, and which ETFs they are part of:
Other Sources of Dividend Investment Ideas
There are several lists to quickly screen for businesses that regularly pay rising dividends.
- The Dividend Aristocrats Index is based on 64 companies part of the S&P 500 and with 25+ years of consecutive dividend increases.
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of less than 20 businesses with 50+ years of consecutive dividend increases.
- The MoneyInvestExpert Defensive Aristocrats is a performance-based top-10 selection of the Dividend Aristocrats to outperform the market in the long-term.
- Portfolio lists like the Berkshire Hathaway Portfolio or Bill Gates’stock portfolio can be a source.
- For the European focused investors, there is also the list of European Dividend Aristocrats.
- Dividend Champions are not necessarily members of the S&P 500 index, have increased their dividend for 25 or more consecutive years.
- 100+ years of dividend, the list of stocks that pay over 100 years of dividend can be a list of inspiration.
- Blue Chips stocks from the US or the European ones.
Next to selecting the right dividend stocks, important principles for successful long-term investing are Disciple, Diversification, Defensive & indeed Dividend. Read more about this in our free e-book.
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