Stop Chasing High Yields! Focus on Dividend Growth Instead

High dividend yields may be attractive in the current environment, but investors need to focus on future dividend growth, not current yield.
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High dividend yields may be attractive in the current environment, but investors need to focus on future dividend growth, not current yield, said Eric Ervin, CEO of Reality Shares. 'If earnings continue to slide, the high yield, high payout ratio companies won't be able to maintain their dividend and the stocks will become even more volatile,' said Ervin. 'Take profits now on your high yielding, low quality names, they have significantly outperformed the market. Transition those profits into stronger healthier companies with good prospects for future dividend growth.' The Reality Shares DIVS ETF (DIVY) - Get Report , which seeks to deliver capital appreciation based on the growth of dividends - not stock price - of large cap companies, is up threee percent year-to-date.