Three Dividend Increase ETFs Worth Investing in with a $1,000 Budget, Maintain Long-Term Ownership
Looking for some reliable dividend growth ETFs to invest in forever? Let's dive into three great options, each offering a unique twist on the concept of never-ending dividend payouts.
Vanguard Dividend Appreciation ETF (VIG)
If you've been exploring ETFs, you've likely stumbled upon the ProShares S&P 500 Dividend Aristocrats® ETF (NOBL). This fund focuses on blue-chip stocks that have maintained dividend growth for at least 25 years. While this strategy can yield impressive results, it's not the most efficient way to maximize growth with a dividend-centric ETF.
Enter the Vanguard Dividend Appreciation ETF (VIG). This fund aims to mimic the S&P U.S. Dividend Growers Index, which requires just 10 consecutive years of dividend increments to gain entry. The Vanguard ETF includes less prominent stocks and excludes those with high yields, helping ensure that your investments are focused on steadily-growing companies instead of those that might be in financial trouble due to unsustainable dividends.
The VIG has a 1.7% trailing yield, lower than NOBL but easily offset by its exceptional growth and consistent dividend payouts.
ProShares S&P Midcap 400 Dividend Aristocrats® ETF (REGL)
Sure, NOBL focuses on Dividend Aristocrat® blue-chip stocks, but why not expand your horizons and check out their mid-cap counterparts? The S&P 400 Dividend Aristocrats® Index includes mid-cap stocks that have increased their annual dividend payments for 15 years in a row.
By investing in the ProShares S&P Midcap 400 Dividend Aristocrats® ETF (REGL), you'll gain easy access to this sector while benefitting from ProShares' know-how in handling the buying and selling process. Moreover, this strategy is a great way to diversify your portfolio and enjoy the long-term growth potential that mid-caps offer.
Invesco S&P 500 High Dividend Growers ETF (DIVG)
If you're looking for something fresh on the ETF scene, consider the Invesco S&P 500 High Dividend Growers ETF (DIVG). Launched in late 2023, this ETF is still relatively new and has less than $5 million in assets under management – but don't let that deter you!
The DIVG focuses on the S&P 500 High Dividend Growth Index, which includes 100 stocks from the S&P 500 with high forecasted dividend yield growth and a track record of raising their dividends for five consecutive years. This strategy effectively turns this ETF into a value fund, boasting an average price-to-earnings ratio of 15.6 and a forward-looking ratio of below 14.
Not only does the DIVG provide exposure to a historically-undervalued half of the stock market, but it also houses fantastic dividend-paying stocks that may have slipped under the radar – (think Altria, Franklin Resources, and Bristol-Myers Squibb).
So, if you're ready to take your dividend growth ETF portfolio to the next level and embrace the future of investing, the Invesco S&P 500 High Dividend Growers ETF is definitely worth considering.
Remember, each of these ETFs has its strengths, so choose the one that aligns best with your investing style and risk tolerance. Happy dividend hunting!
After exploring various dividend growth ETF options, you might also want to think about allocating some funds towards strategies focused on maximizing money growth. For instance, the Invesco S&P 500 High Dividend Growers ETF (DIVG) focuses on high dividend yield growth stocks that have consistently increased their dividends for five years. This strategy can help you tap into historically undervalued stocks that might otherwise go unnoticed.
Furthermore, to ensure your investment strategy is well-rounded, you could also consider incorporating other types of investments, such as bonds or real estate, into your portfolio, as diversification is crucial for managing financial risk and maximizing returns over the long term.
