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DGRO Is a Popular Dividend ETF for Passive Income, but Is It the Best?

SM

Selena Maranjian

The article highlights the benefits of investing in dividend-paying stocks and specifically focuses on the iShares Core Dividend Growth ETF (DGRO). This ETF is a popular choice for investors due to its combination of yield and growth. The discussion implies that including dividend payers in a portfolio can be advantageous, especially for retirees who can use dividends as a source of income. It also notes that those still in the workforce can benefit from reinvesting dividends to increase their long-term holdings.

The article provides data to support the performance of dividend payers, showcasing how different dividend strategies have historically yielded various average returns. For instance, dividend growers and initiators have an average annual total return of 10.24%, outperforming others such as non-payers and the equal-weighted S&P 500 index. This data underscores the potential of dividend payers to deliver solid returns over time.

The author details how investing consistently in dividend payers and allowing compound interest to work can significantly grow one's investments over the years. Tables are presented illustrating how saving $12,000 annually at different growth rates could potentially lead to substantial wealth accumulation over decades. These examples aim to encourage long-term investment in solid, income-generating assets like dividend-focused ETFs.