"Dividends are portions of a company's profits that are paid out to shareholders. But it can be difficult to pick out the right dividend stocks for your portfolio. This is why many investors turn to exchange-traded funds (ETFs). ETFs may invest in hundreds or even thousands of dividend paying stocks handpicked by professionals. So they offer instant diversification and a certain degree of security."
"The Schwab U.S. Dividend Equity ETF (SCHD) is quite popular among investors today. It has a high yield of around 3.88%. The fund invests in 103 high quality, large cap companies within the Dow Jones U.S. Dividend 100 Index. SCHD fund managers screen these companies for consistent dividend payments as well as strong financials like cash flow. The sectors it mainly focuses on are energy, consumer staples and healthcare sectors. These are generally considered defensive sectors."
Generating regular retirement income can be pursued through dividend-paying stocks and dividend-focused ETFs. Dividend ETFs pool many dividend payers to provide instant diversification and professional selection, and yield measures income as a percentage of fund value. Schwab offers dividend ETF options such as the Schwab U.S. Dividend Equity ETF (SCHD), which yields about 3.88% and holds 103 large-cap companies from the Dow Jones U.S. Dividend 100 Index. SCHD screens for consistent dividends and strong cash flow, emphasizes energy, consumer staples and healthcare, charges a 0.06% expense ratio, has $71.55 billion in net assets, and shows a strong five-year return.
Read at 24/7 Wall St.
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