Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Looking For Dividends? Consider These 2 ETFs

By Investing.com (Tezcan Gecgil/Investing.com )ETFsMar 12, 2021 09:40AM ET
www.investing.com/analysis/looking-for-dividends-consider-these-2-etfs-200566660
Looking For Dividends? Consider These 2 ETFs
By Investing.com (Tezcan Gecgil/Investing.com )   |  Mar 12, 2021 09:40AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Dividend investing is a time-tested strategy that might appeal to many retail investors. The yield, particularly in the current period of record low interest rates, is important for many passive-income seekers, including retirees. Individuals can also reinvest those dividends to buy more shares and their portfolio will also benefit from the effects of compound interest.

We discussed dividends in previous articles (for example, here, here, here, and here). Today, we extend the discussion by introducing two other funds.

1. Utilities Select Sector SPDR Fund

Current Price: $61.58
52-Week Range: $43.44 - $67.93
Dividend Yield: 3.19%
Expense Ratio: 0.12% per year

Broader markets have become volatile again. Therefore, in addition to dividend income, many retail investors are also seeking long-term stability. Given the regular need for water, electricity and gas, utilities are regarded as defensive shares.

Most countries regulate utilities, meaning they typically have modest but steady profits as well as high cash flows. Thus, utilities stocks tend to have juicy dividends.

The Utilities Select Sector SPDR® Fund (NYSE:XLU) gives access to businesses from the utilities, independent power producers and renewable energy groups. Since its inception in December 1998, assets under management have grown to $11.74 billion.

XLU Weekly
XLU Weekly

XLU, which includes 28 holdings, tracks the returns of the Utilities Select Sector Index. In terms of sub-sectors, Electric Utilities have the highest weighting with 63.56%. Next in line are Multi-Utilities (30.06%), Water Utilities (2.90%), Independent Power and Renewable Electricity Producers (2.14%) and Gas Utilities (1.34%).

Close to 65% of total fund is in the top 10 stocks. Dominion Energy (NYSE:D), Exelon (NASDAQ:EXC), American Electric Power (NASDAQ:AEP), Sempra Energy (NYSE:SRE) and Xcel Energy (NASDAQ:XEL) lead the names in XLU.

Year-to-date, the ETF is down 1.5%. XLU's forward P/E and P/B ratios are 18.39 and 2.14, respectively. Long-term investors may consider buying the dips, especially if the fund moves below the $60 level.

2. Defiance Next Gen Connectivity ETF (FIVG)

Current price: $34.93
52-Week Range: $18.66 - $37.09
Dividend Yield: 1.18%
Expense Ratio: 0.3%

Our next choice comes from the tech space. Most investors regard technology shares as growth stocks. Put another way, they are not easily associated with dividends. Yet, there are many technology companies, especially mature ones, that also pay dividends. They have established business model, products and, hence, regular revenues and cash flows. These tech businesses offer the potential of both passive income and share price growth.

The Defiance 5G Next Gen Connectivity ETF (NYSE:FIVG) gives access to the "fifth generation" or 5G businesses at the forefront of this most recent cellular network standard. It provides exposure to businesses that are behind the growth of 5G technologies. Semiconductor businesses, cloud computing firms and telecommunications groups are among the stocks in the ETF.

FIVG Weekly
FIVG Weekly

According to Verizon (NYSE:VZ):

"The connectivity benefits of 5G are expected to make businesses more efficient and give consumers access to more information faster than ever before. Connected cars, smart communities, industrial IoT, immersive education—they all will rely on 5G networks."

By mid-decade, one third of the global population is expected to be covered by 5G networks.

Since its inception in March 2019, net assets have reached $1.1 billion. FIVG, which has close to 80 holdings, tracks the returns of the BlueStar Global 5G Communications Index. The components of the index are revised twice a year. NXP Semiconductors (NASDAQ:NXPI), Analog Devices (NASDAQ:ADI), LM Ericsson (NASDAQ:ERIC), Qualcomm (NASDAQ:QCOM), Xilinx (NASDAQ:XLNX) and Keysight Technologies (NYSE:KEYS) are among the top names in the roster.

In the past 12 months, the fund has returned more than 45% and seen a record high in recent weeks. But so far in 2021, volatility has put pressure on many names in the fund. As a result, FIVG is up about 1.5%. Those investors betting on this next-generation wireless networking technology should keep the ETF on their radar. A further decline toward the $30 level would improve the risk/return profile.

Looking For Dividends? Consider These 2 ETFs
 

Related Articles

BlackBull Markets
Yellow Card For Sports ETF By BlackBull Markets - Sep 01, 2021

Cristiano Ronaldo announced that he would be leaving Juventus Football Club (MI:JUVE) and returning to play for the club where he started his professional career, Manchester United...

Looking For Dividends? Consider These 2 ETFs

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
Tim F
Tim F Mar 14, 2021 10:16PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
1.18% with a 0.3% expense ration for a recommended dividend etf selection? How did this article make it through the editor? Unbelievable... A 1.18% yield
Leonel Ledesma
Leonel Ledesma Mar 12, 2021 11:31PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I'm looking for something that pays more dividend then the yearly inflation
Николай Миронов
Николай Миронов Mar 12, 2021 11:31PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Does it exist?
In Sight
Insight Mar 12, 2021 1:54PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I'd go with insurances and oil stocks/etfs. You end up somewhere between 3-6% e.g. A0H08M and A0H08K. Bought both when they were beaten down: 22€ and 20€.
Steve Taylor
Steve Taylor Mar 12, 2021 11:50AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
A 1.18% yield doesn't enter my wheelhouse for a dividend paying ETF, especially in 5G sector. Might be OK for a growth play. I can get better or same yield from a short-term treasure or bond fund. When headline "search for yields" make your target at least 3%. My dividend portfolio, which is a mix of bonds and stock ETFs, yields 4.7%.
Alejandro Santana
Alejandro Santana Mar 12, 2021 11:50AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
What is the better chance for buy?
Alejandro Santana
Alejandro Santana Mar 12, 2021 11:50AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
@Steve Taylor, hi, which ETF do you recommend?
Don Getty
Don Getty Mar 12, 2021 11:50AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
exxactly - owning suncor shares gets you a 2.9% div, is up 80% since i bought it at 16$ - is expected to increase it dividend as it cut it 55% when the price of oil tanked last year and  should see another 50% gain in value as the economy recovers and that's at oil prices today if oil spiles to 100/ then the up price could be much higher!
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email