Key insights
- The article highlights the historical outperformance of dividend-paying stocks and suggests dividend-focused ETFs as investment options. It presents a list of 12 ETFs with their recent yields and historical returns. While informative, the article primarily focuses on historical data and doesn't offer strong forward-looking signals for the broader US equity market. The recommendation of dividend ETFs may lead to slight capital inflows into these funds.
If you don't yet appreciate the power of dividends for long-term wealth-building, take a gander at this table:
Dividend-Paying Status
Average Annual Total Return, 1973-2025
Dividend growers and initiators
10.22%
Dividend payers
9.20%
No change in dividend policy
6.87%
Dividend non-payers
4.21%
Dividend shrinkers and eliminators
(0.96%)
Equal-weighted S&P 500 index
7.74%
Those numbers alone might be enough to have you looking for great dividend investments. If not, consider:
So what are some great dividend investments? Well, you can certainly seek solid dividend-paying stocks. But I'd like to suggest checking out some dividend-focused exchange-traded funds (ETFs). Here are 12 to consider, including an S&P 500 index fund.
ETF
Recent Yield
5-Year Avg. Annual Return
10-Year Avg. Annual Return
15-Year Avg. Annual Return
iShares Preferred & Income Securities ETF (PFF)
5.65%
2.04%
3.58%
4.43%
State Street SPDR Portfolio S&P 500 High Dividend ETF (SPYD)
4.23%
7.12%
8.71%
N/A
Vanguard Real Estate ETF (VNQ)
3.62%
3.77%
5.43%
7.26%
Vanguard International High Dividend Yield Index Fund ETF (VYMI)
3.47%
12.82%
10.80%
N/A
Schwab U.S. Dividend Equity ETF (SCHD)
3.29%
15.07%
8.22%
12.70%
Fidelity High Dividend ETF (FDVV)
2.81%
13.31%
N/A
N/A
Vanguard Energy Index ETF (VDE)
2.32%
21.67%
9.64%
5.89%
Vanguard High Dividend Yield ETF (VYM)
2.24%
11.16%
11.75%
11.91%
iShares Core Dividend Growth ETF (DGRO)
2.00%
10.18%
13.20%
N/A
Vanguard Total World Stock ETF (VT)
1.67%
11.25%
12.80%
10.24%
Vanguard Dividend Appreciation ETF (VIG)
1.51%
10.11%
12.96%
11.97%
Vanguard S&P 500 ETF (VOO)
1.08%
13.88%
15.54%
14.11%
There's a clear trade-off between dividend yields and growth rates, though a few of the ETFs -- such as the State Street SPDR Portfolio S&P 500 High Dividend ETF and the Schwab U.S. Dividend Equity ETF -- offer a good mix of both.
Here are some notes about the funds above:
So give dividend-focused ETFs some consideration for your long-term portfolio, because dividends are really hard to beat.