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3 Dividend ETFs Delivering Steady Income To Any Long-Term Portfolio

Published 10/20/2021, 04:51 PM
Updated 09/02/2020, 02:05 PM

Dividends are typically regarded as a way for businesses to reward long-term stock investors who remain loyal stakeholders. These payouts provide regular income, stability and are particularly attractive in times when share price appreciation is limited.

Research by BankInvest Group highlights:

“Dividend investing has historically outperformed both the broader market and value investing, and at the same time shown lower risk… Dividend investing sees fewer years with losses.”

Today we are highlighting three exchange-traded funds (ETFs) that may appeal to readers seeking passive-income stocks and funds for long-term portfolios.

1. Invesco High Yield Equity Dividend Achievers ETF

Current Price: $20.51
52-Week Range: $14.35 – $21.85
Dividend Yield: 3.85%
Expense Ratio: 0.53% per year

The Invesco High Yield Equity Dividend Achievers™ ETF (NASDAQ:PEY) currently invests in 50 stocks selected for their dividend yields as well as those showing consistent dividend growth.

PEY Weekly Chart.

PEY, which tracks the returns of the NASDAQ US Dividend Achievers 50 Index, was first listed in December 2004. The top 10 names make up about 30% of net assets of $959.4 million.

In terms of sectors, we see financials (23.52%), followed by utilities (22.65%), consumer staples (17.21%), energy (13.91%) and communication services (6.89%).

Leading holdings include mid-stream service provider ONEOK (NYSE:OKE), oil major Exxon Mobil (NYSE:XOM), telecommunications giant AT&T (NYSE:T), petroleum refiner and distributor of transportation fuels Valero Energy (NYSE:VLO), Northwest Bancshares (NASDAQ:NWBI) and International Business Machines (NYSE:IBM).

The fund returned 17.5% year-to-date, hitting an all-time high in May. The fund’s price-to-earnings (P/E) and price-to-book (P/B) ratios are 14.06x and 1.67x. Interested readers could find value around current price levels.

2. iShares Global Utilities ETF

Current Price: $60.83
52-Week Range: $55.52 - $64.68
Dividend Yield: 3.02%
Expense Ratio: 0.43% per year

The iShares Global Utilities ETF (NYSE:JXI) gives access to global utilities that supply electricity, water and gas. The fund began trading in September 2006, and has around $150.5 million in assets.

JXI Weekly Chart.

JXI, which has 64 holdings, tracks the S&P Global 1200 Utilities (Sector) Capped Index. Electric utilities have the highest slice, with 59.95%. Next in line are multi-utilities (30.37%), gas utilities (5.07%) and water utilities (3.34%). The leading 10 names comprise more than 40% of the fund.

NextEra Energy (NYSE:NEE), Duke Energy (NYSE:DUK), Southern Company (NYSE:SO), Iberdrola (OTC:IBDRY), Enel (MI:ENEI), Dominion Energy (NYSE:D) and Exelon (NASDAQ:EXC) lead the names in JXI.

So far in 2021, the fund returned 1%. After hitting a multi-year high in August, it has lost about 6%. P/E and P/B ratios stand at 20.78x and 2.06x. A potential decline below $60 would improve the margin of safety.

3. WBI Power Factor High Dividend ETF

Current Price: $27.65
52-Week Range: $17.93 - $26.68
Dividend Yield: 4.16%
Expense Ratio: 0.70% per year

The WBI Power Factor® High Dividend ETF (NYSE:WBIY) focuses on generating high-dividend yields while taking into consideration various fundamental metrics when choosing stocks. Fund managers highlight that most investors are looking for high current income, inflation protection and consistent capital growth.

WBIY Weekly Chart.

The ETF, which currently has 51 holdings, started trading in December 2016. The top 10 names comprise more than half of net assets of $65 million. In other words, it is a much smaller fund than the other two ETFs introduced above.

In terms of the sub-sectoral breakdown, communications services stocks make up the highest portion, with 10.42%; followed by health care (9.83%); consumer defensive (6.15%); and technology (6.02%) shares.

Among the leading names in the roster are communications heavyweight Verizon (NYSE:VZ), materials science giant Dow (NYSE:DOW), pharmaceuticals group AbbVie (NYSE:ABBV), global food and beverage name Kraft Heinz (NASDAQ:KHC), International Business Machines, Southern and International Paper (NYSE:IP), which produces packaging and paper products.

YTD the fund returned 21.7% and saw a record high in June. Interested readers should keep the fund on their radar with a view to buy around $26.

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