3 Strategies to Score Big Dividends Via High Yield ETFs

Stock dividend information is crucial to investors of all strategies. The stock
market hasn't returned a single red cent in over twelve years as measured by
the S&P 500.  Twelve years is a long time to go without earning a return on
your investment, particularly if you are close to retirement. But investors who
have relied on high yield dividend stocks and ETFs have at least been rewarded
with the payouts from their portfolios via quarterly disbursements. With the
boom years of the 1980s and 1990s now a distant memory, it is not shocking to
see investors losing faith in the cult of capital gains and gravitating instead
to dividend-paying stocks and ETFs.  In a world in which paper gains can be
ephemeral, it's good to be paid in cold, hard cash. Today, we have our choice
of a host of dividend focused ETFs so many, in fact, that it can be daunting to
choose.  Though all claim dividends as the central piece of their investment
mandate, there are significant differences between strategies that investors
should understand.  In this article, I'm going to pick apart some of those
differences. Dividend ETFs Three Strategies There are already well over a dozen
dividend ETFs that focus on the U.S. market, and I included the most popular in
the chartbelow.  Each can be grouped into one of three major categories: High
dividend yield High dividend growth rate Dividend weighting The first category
is what most investors immediately think of when they hear "dividend
investing."  The primary focus is on high current income with capital gains
as a distant second.  This is good, old-fashioned "widows and orphans"
investing and is the most conservative of the three strategies. The iShares Dow
Jones U.S. Select Dividend ETF (NYSE: DVY ) is the oldest dividend-focused ETF
and is the only one to follow a pure high-yield strategy.  The fund represents
America's top stocks by dividend yield, selected annually.   To weed out
those at risk of cutting their dividend, companies must have a positive
five-year dividend per share growth rate and a dividend payout ratio of no more
than 60% of earnings.   The stocks that qualify are then ranked by dividend
yield and the top 100 are selected. The result is a solid ETF that currently
yields more than the 10-year Treasury with an expense ratio and turnover that
are tolerably low. The second category is based less on dividend yield and more
on the growth rate of dividends. KEEP READING FOR MORE INFO