5 High-Yield Dividend ETFs & Stocks to Buy Now
Wall Street has been experiencing wild swings in September. Earlier this month, the sharp sell-off in the technology sector led to bloodbath in the stock market and now the latest policy statement from the Federal Reserve sparks some caution.
Chairman Jerome Powell kept U.S. interest rates near zero and pledged to keep rates at lower levels until the end of 2023. The central bank will not increase rates until labor market conditions return to the “maximum employment,” and inflation has risen to 2% and “is on track to moderately exceed 2% for some time.” As such, it will continue to purchase at least $80 billion a month in U.S. Treasuries and $40 billion a month in mortgage-backed securities to make market movements smooth and “foster accommodative financial conditions.”
Though the U.S. economy has bounced back faster than expected, the central bank warned that the full recovery is still far away and will continue to face risks due to the ongoing pandemic (read: 5 Sector ETFs That Have Trumped Covid Fear This Year).
Further, the volatility is expected to continue in the weeks ahead given elevated valuation concerns and election uncertainty. Rise in U.S.-China trade tensions and failure to have the new coronavirus aid will keep the returns at check. If we go be history, September is a weak month for the stock market. The seasonal phenomenon took a toll on the stocks as investors are more prone to selling than buying when they return from their summer vacations, trading volume after Labor Day is mostly bearish, many mutual funds have fiscal years ending Sep 30, window-dressing is rampant, and investors generally sell stocks to pay tuition bills for their kids’ private schools and colleges.
In this backdrop of a low-rate environment and market volatility, investors are in search of juicy yields. And nothing is better than the high-yield dividend ETFs & stocks.
Why High-Yield Dividend?
High-yield dividend ETFs and stocks play a defensive role in a portfolio and can reduce volatility in turbulent times. These products provide greater stability in the form of mature companies that are less volatile to the large swings in stock prices while ensure safety in the form of outsized payouts or solid yields on a regular basis, thanks to their strong cash flow streams.
As such, we have presented five ETFs & stocks that yield more than 5% in dividends and could be interesting plays should the same trends prevail. The ETFs are not confined to a particular industry but offer broad exposure to a number of sectors.
Global X SuperDividend Alternatives ETF ALTY – Annual Yield: 11.76%
This ETF offers exposure to a variety of alternative income-generating categories, including real estate, master limited partnerships and infrastructure, institutional managers, and fixed income and derivative strategies. It follows the Indxx SuperDividend Alternatives Index, holding 45 stocks in the basket. The product has accumulated $18 million in its asset base and charges 2.95% in annual fees. It trades in a paltry volume of 15,000 shares a day on average.
Global X SuperDividend ETF SDIV – Annual Yield: 10.8%
This ETF provides exposure to the 104 highest-dividend-paying equities around the world by tracking the Solactive Global SuperDividend Index. It has amassed $651.5 million in its asset base and sees good trading volume of about 380,000 shares a day on average. Its expense ratio is 0.59%. The fund has a Zacks ETF Rank #3 (Hold) with a Low risk outlook.
Global X SuperDividend U.S. ETF DIV – Annual Yield: 10.09%
This fund provides exposure to 43 of the highest-dividend-yielding U.S. securities by tracking the INDXX SuperDividend U.S. Low Volatility Index. The product has amassed $418.7 million in its asset base while trading in good volume of about 198,000 shares. It charges 46 bps in fees per year from investors and has a Zacks ETF Rank #3 with a Medium risk outlook.
WBI Power Factor High Dividend ETF WBIY – Annual Yield: 5.91%
This ETF offers exposure to quality stocks that have the highest dividend yield with a deep value bias and multi-factor fundamental analysis. It follows the Solactive Power Factor High Dividend Index, holding 51 stocks in the basket. The product has amassed $41 million in its asset base and charges 70 bps in annual fees. It trades in a lower volume of 7,000 shares a day on average.
SPDR Portfolio S&P 500 High Dividend ETF SPYD – Annual Yield: 5.84%
This fund provides exposure to stocks with a high level of dividend income and the opportunity for capital appreciation by tracking the S&P 500 High Dividend Index. Holding 80 stocks in its basket, the fund is well diversified across securities with each making up for less than 1.6% of assets. It has AUM of $2.1 billion and trades in volume of about 1.4 million shares. It charges 7 bps in annual fees and has a Zacks ETF Rank of #2 (Buy) with a Medium risk outlook (read: 5 Cheap Dividend ETFs for Safe and Consistent Income).
PBF Logistics LP PBFX – Annual Dividend: 13.30%
This fund is engaged in owning, leasing, operating, developing and acquiring crude oil and refined petroleum products terminals, pipelines, storage facilities and similar logistics assets. With a market cap of $562.4 million, the stock has a Zacks Rank #2 and a VGM Score of B.
Delek Logistics Partners L.P. DKL – Annual Yield: 11.24%
This company owns, operates, acquires and constructs crude oil and refined products logistics and marketing assets. With a market cap of $962.3 million, the stock has a Zacks Rank #2 and a VGM Score of B.
Arbor Realty Trust ABR – Annual Yield: 10.24%
This specialized real estate finance company invests in real estate-related bridge and mezzanine loans, preferred equity, mortgage-related securities and other real estate-related assets. It has a market cap of $1.36 billion and has a Zacks Rank #2. It has a solid VGM Score of B (read: Here's Why REIT ETFs are Sizzling With Opportunities).
BG Foods Inc. BGS – Annual Yield: 7.20%
This company manufactures, sells and distributes high quality, shelf stable, frozen food and household products across the United States, Canada and Puerto Rico. It has a market cap of $1.69 billion and carries a Zacks Rank #2. It flaunts a top VGM Score of A.
Janus Capital Group Inc JHG – Annual Yield: 7.19%
This investment management company provides investment advisors for equities, fixed income, property and private equity sectors. The stock has a Zacks Rank #2 and VGM Score of A. It has a market cap of $3.68 billion.
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BG Foods, Inc. (BGS): Free Stock Analysis Report
Arbor Realty Trust (ABR): Free Stock Analysis Report
PBF Logistics LP (PBFX): Free Stock Analysis Report
Delek Logistics Partners, L.P. (DKL): Free Stock Analysis Report
Global X SuperDividend U.S. ETF (DIV): ETF Research Reports
Global X SuperDividend ETF (SDIV): ETF Research Reports
SPDR Portfolio SP 500 High Dividend ETF (SPYD): ETF Research Reports
WBI Power Factor High Dividend ETF (WBIY): ETF Research Reports
Janus Capital Group, Inc (JHG): Free Stock Analysis Report
Global X SuperDividend Alternatives ETF (ALTY): ETF Research Reports
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