Sign up for our Moneywise newsletter to receive a steady flow of actionable ideas from Wall Street's top firms.
Vanguard High Dividend Yield ETF (VYM)
A lot of companies pay dividends, but some are more generous than others.
If you want to invest in a portfolio of companies that are characterized by oversized payouts, consider the Vanguard High Dividend Yield ETF.
The fund takes a passive, full replication approach to track the performance of the FTSE High Dividend Yield Index. It holds 443 stocks, so it is well diversified.
The ETF’s top holdings include household names like Johnson & Johnson (JNJ) and Procter & Gamble (PG) — companies that have been paying increasing dividends for decades.
VYM also boasts a very low expense ratio of 0.06%.
More: Best investment apps
Contemporary art has outperformed the S&P 500 by 131% for the past 26 years. Join the exclusive platform to invest in million-dollar works by artists like Banksy, Basquiat, and more. Get started today and diversify your portfolio with art.
Learn MoreiShares U.S. Dividend and Buyback ETF (DIVB)
Paying dividends isn’t the only way to return cash to investors. Companies can also repurchase their shares. When a company buys back its stock, it reduces the number of shares outstanding, allowing each remaining investor to own a larger portion of the business.
If you want to follow the buyback theme, look into the iShares U.S. Dividend and Buyback ETF.
The fund tracks the Morningstar US Dividend and Buyback Index, which consists of companies with a history of dividends and share repurchases. Its expense ratio is 0.25%.
Right now, DIVB holds 319 stocks, with its three top holdings being Apple (AAPL), Microsoft (MSFT), and Meta Platforms (FB). In 2021, Apple spent $88.3 billion on buybacks, Microsoft spent $29.2 billion, and Meta bought back $50.1 billion of its own shares.
Pacer US Cash Cows 100 ETF (COWZ)
Free cash flow represents the money a company generates after all expenses — including capital expenditures — are paid. If a company generates a lot of free cash flow, it’s typically in a good position to return cash to investors.
That’s why the Pacer US Cash Cows 100 ETF is a potentially timely opportunity.
The fund is based on the Pacer US Cash Cows 100 Index, which screens the Russell 1000 Index to arrive at 100 companies with the highest free cash flow yield. Currently, its top three holdings are Valero Energy (VLO), Dow (DOW), and Occidental Petroleum (OXY).
The index is reconstituted and rebalanced on a quarterly basis. COWZ has an expense ratio of 0.49%.
Sign up for our Moneywise newsletter to receive a steady flow of actionable ideas from Wall Street's top firms.
Acorns rounds your everyday purchases to the nearest dollar and invests your spare change. That means any spare change from your daily spending – gas, coffee or groceries – will go towards building your wealth. Get up to $20 when you sign up with this special link.
Get StartedMore from Moneywise
- ‘It’s so horrible that I want to buy it’ — Jim Cramer likes these 2 beaten-down tech names that are still posting white-hot revenue growth
- Goldman Sachs likes these 3 top dividend stocks yielding as high as 7.6% — in a manic market, locking down a growing income stream makes sense
- Warren Buffett just said he doesn’t own bitcoin because ‘it isn’t going to do anything’ — he’d rather own these 2 tangible assets instead
Sponsored
Meet Your Retirement Goals Effortlessly
The road to retirement may seem long, but with WiserAdvisor, you can find a trusted partner to guide you every step of the way
WiserAdvisor matches you with vetted financial advisors that offer personalized advice to help you to make the right choices, invest wisely, and secure the retirement you've always dreamed of. Start planning early, and get your retirement mapped out today.
