Is there any good source of monthly dividend income?
To me an ideal stock investment should have around 10%
annual growth and about 2-4% dividend yield. One good thing about this
combination is that even the stock market crashes (like 2008), most probably
that 2-4% dividend yield will somewhat minimize the loss. Another beauty is
that, if I reinvest the dividend in that time, I could buy more of same stock
compared to regular period.
Today I will talk about an ETF that is growing about
10% annually for last five years with about 4.4% dividend yield . Additionally
this ETF disburses dividend monthly (($0.15/share/month) so its a convenient
source of monthly income. Currently I am just reinvesting automatically
whatever the dividend amount disbursed in my brokerage account.
Invesco
S&P 500® High Dividend Low Volatility ETF (SPHD)
There are two qualities of SPHD that are worth highlighting. Firstly, all the stocks are in this ETF are S&P 500 companies, hence they are all large companies. Secondly, they are the lowest volatile in the index, hence more stable during down market.
Last time, I checked its trading at $43 with an expense ratio of 0.30%. So for every $1000 of my investment, I am getting about $44 equivalent of dividend while paying about $3 as management fee. Although I like management fee not more that 0.15%, but comparing the qualities of this ETF, its not that bad:)
To check if a stock or ETF is overvalued, I look into the Price/Earning Ratio (P/E). Historically a reasonable P/E should be around 15. Currently SPHD has a P/E of 14.87, so I guess this is not overvalued like many other stocks or ETFs in this bull market.
Here is the growth of a hypothetical growth of $10000 invested since 2013. The growth rate of SPHD is quite similar of S&P 500 index since 2013.
The top three sector exposures are in Real Estate, Financial and Utilities sectors.
Individual holdings wise, there are no single companies above 5% allocation. I guess this is good amount of diversification without too much dependency on any single company.
I am adding this ETF to my portfolio at regular interval and holding it as part of my long term investment.
There are two qualities of SPHD that are worth highlighting. Firstly, all the stocks are in this ETF are S&P 500 companies, hence they are all large companies. Secondly, they are the lowest volatile in the index, hence more stable during down market.
Last time, I checked its trading at $43 with an expense ratio of 0.30%. So for every $1000 of my investment, I am getting about $44 equivalent of dividend while paying about $3 as management fee. Although I like management fee not more that 0.15%, but comparing the qualities of this ETF, its not that bad:)
To check if a stock or ETF is overvalued, I look into the Price/Earning Ratio (P/E). Historically a reasonable P/E should be around 15. Currently SPHD has a P/E of 14.87, so I guess this is not overvalued like many other stocks or ETFs in this bull market.
Here is the growth of a hypothetical growth of $10000 invested since 2013. The growth rate of SPHD is quite similar of S&P 500 index since 2013.
The top three sector exposures are in Real Estate, Financial and Utilities sectors.
I am adding this ETF to my portfolio at regular interval and holding it as part of my long term investment.
Disclaimer: This article shows my personal opinion. This is no way professional financial advice. You may seek professional advice or conduct own research before investment.
