This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Easiest Way to Find High-Yielding Dividend Stocks

Updated to include the PowerShares High Yield Dividend Achiever Portfolio

NEW YORK ( TheStreet) -- Doing the required research to determine which dividend-yielding stocks should be in your portfolio is a daunting task. Consider investing in dividend exchange traded funds instead.

Investors, roiled by record volatility, have looked high and low for big dividends. Given that the Federal Reserve plans to keep interest rates at close to zero for at least another three years, dividend investing probably will gain in popularity.

Investing in individual stocks is risky. It's easy to make the mistake of buying a stock with an accidental dividend yield -- those that have inflated dividend yields because of a steep drop in the stock price. An example is Frontier Communications (FTR - Get Report). With a 15% yield, it is the highest-yielding stock in the Dow Jones Industrial Average and S&P 500 Index combined.

A safer way to grab higher yields is through mutual funds or ETFs that focus on dividend stocks. Comparing the two, mutual funds have a history of chronic underperformance versus benchmarks, whereas ETFs tend to be successful in mimicking benchmark indices. Other benefits to investing in ETFs over a mutual fund include lower costs and taxes, ease of trading and higher liquidity.

A total of 18% of new inflows into ETFs, or about $450 million, have been put into those that offer dividends, according to Eric Pollackov, managing director of ETF Capital Markets at Charles Schwab. Ten of the top 20 ETFs are income-generating ETFs.

ETFs mimic the performance of an index, and, while they're passively managed, the underlying index usually is put together based on specific criteria. In the case of dividend ETFs, indices could be based on stocks that have a long history of dividend increases or those with a specific payout ratio, for example.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BLK $368.08 0.00%
DVY $79.04 0.00%
FTR $5.16 0.00%
SDY $79.15 0.00%
VIG $81.93 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs