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High Yield vs. Dividend Growth: Which Dividend ETF Is Right for You?
With so many different flavors of dividend ETFs available, investors can often be overwhelmed by the choices.
One useful distinction is to break the dividend category into two sections: high yield and dividend growth.
High dividend yield ETFs, or “dividend yield ETFs,” seek out stocks paying out adequate dividends right away,. However, these stocks aren’t as likely to grow the size of that dividend over time.
Meanwhile, dividend growth ETFs select for stocks whose dividend payments may be more modest, but which have a track record of regularly increasing their dividends, making them attractive long-term investments.