History Says You'll Want to Buy 1 of These Top ETFs and Never Look Back

2 hours ago 2

Matt DiLallo, The Motley Fool

Sun, March 29, 2026 astatine 12:05 PM CDT 5 min read

Hartford Funds and Ned Davis Research dug into the humanities information connected dividend stocks by their policy. They recovered that implicit the past 50 years, dividend growers and initiators successful the S&P 500 person delivered importantly higher full returns (10.2% annualized) than companies that didn't summation their dividends (6.8%) oregon that don't wage dividends (4.3%). This humanities information suggests you'll privation to put successful dividend maturation stocks.

Buying exchange-traded funds (ETFs) is an casual mode to put successful dividend growers. Here are 3 apical options to consider.

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The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) tracks an scale (Dow Jones U.S. Dividend 100 Index) that measures the show of 100 high-yielding dividend stocks with accordant records of paying dividends. It screens companies based connected their dividend yield, five-year dividend maturation rate, and fiscal spot comparative to their peers.

Dividend output is certainty an important facet of the Schwab U.S. Dividend Equity ETF. The fund's trailing 12-month dividend output is 3.3%, astir triple the S&P 500's level of 1.2%.

However, dividend maturation is arsenic important. Over the past 5 years, its holdings person grown their dividends astatine a much than 8% compound yearly rate. That's higher than the S&P 500's 5% dividend maturation complaint during that period. The fund's absorption connected dividend maturation stocks has truly paid disconnected implicit the years. It has delivered an annualized full instrumentality of much than 11% implicit the past one-, three-, five-, and 10-year periods, arsenic good arsenic since its inception successful 2011 (13.3%).

The iShares Core Dividend Growth ETF (NYSEMKT: DGRO) besides tracks an scale of companies with a past of dividend maturation (Morningstar U.S. Dividend Growth Index). It starts by screening companies that person accrued their dividends for astatine slightest 5 consecutive years. It past weeds retired companies that analysts don't expect to present affirmative aboriginal net growth, since that's a cardinal to sustainable dividend growth. It besides excludes companies with precocious dividend payout ratios (over 75%) and yields (10% highest yields), since they thin to beryllium astatine higher hazard of dividend reductions. The nett effect is that the iShares Core Dividend Growth ETF holds astir 400 stocks, providing adjacent much diversified vulnerability to dividend maturation stocks.