- (0:30) - Dividend ETFs: What Concerns Should Investors Have?
- (6:30) - Neena's Top Picks: Domestic ETFs
- (11:20) - International ETFs: Higher Dividends
- (17:00) - High Dividend Stock Screener
- (18:50) - Tracey's Top Stock Picks
- (22:10) - Episode Roundup: SCHD, DRGO, DEM, IDV, BP, M
Welcome to Episode #124 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by Neena Mishra, the Editor of the ETF Investor newsletter, to discuss stocks and ETFs that are paying attractive dividend yields.
It’s not as easy as simply picking out the ETFs or the stocks with the highest yields. Those ETFs and stocks might not be the “best” ones to buy, for a whole host of reasons.
Tracey and Neena discuss the pitfalls of buying simply for yields.
Where DO you look for yield in a market that has been all about growth?
ETFs with Attractive Dividend Payouts
Neena shared some ideas of her favorite dividend paying ETFs.
1. Schwab US Dividend Equity ETF (SCHD - Free Report) has a yield of about 2.7% and an expense ratio of just 0.07%. 22% of the portfolio is tech, however, so it may be more volatile than you would think.
2. iShares Core Dividend Growth ETF (DGRO - Free Report) has a yield of 2% and its expense ratio is also low at just 0.08%. This ETF has more banks in its portfolio than the Schwab fund.
3. Wisdom Tree Emerging Markets High Dividend ETF (DEM - Free Report) is a way to get emerging market exposure while also getting a juicy dividend. It’s yielding about 3.4%. 26% of the portfolio is from Taiwan with 13% Russian. Expenses are higher as it’s a niche ETF, at 0.6%.
4. iShares International Select Dividend ETF (IDV) has the juiciest yield of these four names. It’s currently yielding about 4.5% with an expense ratio of 0.5%. It invests in high dividend companies in the non-US developed market which means a lot of companies in France, the UK and Australia.
Stocks with Big Dividend Yields
Tracey took a look at some stocks that had big dividend yields but also solid fundamentals.
Did you know some stocks are paying 5%?
1. Macy’s (M - Free Report) never cut its dividend even when shares hit multi-year lows in 2017. It’s currently yielding 5.4%. The stock is still cheap, with a forward P/E of just 7.7. It’s a Zacks Rank #1 (Strong Buy).
2. BP plc (BP - Free Report) continues to pay one of the highest dividend yields in the energy sector. It never cut it during the darkest times of the recent oil price plunge. It’s currently yielding 6.1% with a forward P/E of 15.
With some investors looking for the stability of a dividend payout, what else should you know about the pros, and cons, of investing for yield?
Listen to this week’s podcast to find out.
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