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Dividends have always been tempting for investors looking for a regular income stream, especially when stock markets are volatile and inflation is high. But achieving a decent dividend income goal isn’t easy: You need to add reliable dividend stocks and ETFs to your portfolio that offer significant yields and strong fundamentals.
About nine months ago, someone asked Redditors on r/Dividends how to make $2,000 a month in dividends. The response was overwhelming, with many investors sharing their portfolios and secrets. In the discussion thread, one Redditor claimed to make around $21,903 in dividends annually from an initial investment of $350,000.
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Let’s take a look at the portfolio.
The ETFs and stocks mentioned in the article are for informational purposes only and are based on an earnings report/commentary shared by an investor on Reddit. These are not recommendations or investment advice.
SPDR Portfolio S&P 500 High Dividend ETF
The investor who shared his portfolio details and claimed to earn more than $21,000 in dividends annually said about 25% of his portfolio is allocated to the SPDR Portfolio S&P 500 High Dividend ETF (NYSE: SPYD), which yields more than 4% and tracks the total return performance of the S&P 500 High Dividend Index. Some of the fund’s top holdings include Kellanova, Public Storage, Hasbro and Simon Property.
Schwab US Dividend Equity ETF
Schwab US Dividend Equity ETF (SCHD) is another top dividend ETF in the Redditor’s portfolio who claimed to earn $21,903 per year in dividends. SCHD tracks the Dow Jones US Dividend 100 Index and gives investors exposure to some of the best dividend stocks traded in the US, including Home Depot, Coca-Cola, Verizon, Lockheed Martin, Pepsi, and AbbVie, among many others. This ETF may be ideal for investors looking for higher total returns rather than just dividend income.
Real estate income
About 10% of the Redditor’s dividend income portfolio, which earns over $21,000 per year, is allocated to Realty Income Corp (NYSE: O). Realty Income is one of the most popular monthly dividend stocks with a yield of over 5%. Realty Income Corp has increased its payouts for 30 consecutive years. The company posted strong quarterly results earlier this month, confirming its guidance. With interest rate cuts looming, Realty Income Corp’s (NYSE: O) business is expected to grow, as most of the company’s largest tenants are retailers, which were negatively impacted by the rate hikes.
Strengthen CWP Enhanced Dividend Income ETF
Amplify CWP Enhanced Dividend Income ETF (NYSE:DIVO) generates monthly income by selling covered calls. Some of the ETF’s top holdings include UnitedHealth, JPMorgan, Caterpillar, Home Depot, and Procter & Gamble. The ETF has over $3.4 billion in assets and has become very popular on Reddit. According to a Redditor who did some backtesting in November 2022, a $10,000 investment in the ETF at its inception in 2016 would have grown to $19,970 versus $19,614 for SPY with dividends reinvested. As of August 28, the ETF yields about 4.5%.
Main Street Capital
Another monthly dividend stock in the portfolio that earns over $21,000 per year in dividends, Main Street Capital Corp (NYSE:MAIN) is a business development company. The company has never cut its dividend and has increased its payouts by 120% since going public.
iShares International Select Dividend ETF
iShares International Select Dividend ETF (IDV) is a dividend ETF for investors interested in exposure to top companies outside the U.S. and Canada. The ETF tracks the Dow Jones EPAC Select Dividend Index and yields approximately 6%. Some of the fund’s top holdings include British American Tobacco, BHP GROUP, Vodafone, Rio Tinto and Imperial Brands.
Stag Industrial
Stag Industrial (NYSE:STAG) is an industrial REIT that pays monthly dividends. It has a dividend yield of about 3.6%. The Redditor said that about 7.5% of his dividend portfolio is allocated to the stock. Last month, Stag Industrial reported better-than-expected second-quarter results. FFO in the quarter was $0.61, which beat estimates by $0.02. Revenue increased about 10.5% year-over-year to $189.78 million, which beat estimates by $1.66 million.
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Reaves Utility Income Fund
Reaves Utility Income Fund (UTG) invests in utilities and infrastructure companies to generate monthly dividend income for investors. The fund yields approximately 8% and pays dividends monthly. Some of the fund’s largest holdings include Talen Energy Corp., Constellation Energy, Vistra and CenterPoint Energy.
JPMorgan Nasdaq Equity Premium Income ETF
JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) is another high-yield covered call ETF in the Redditor’s portfolio that earns around $21,000 in dividends annually. The ETF invests in Nasdaq companies and generates additional income by selling call options.
JPMorgan Equity Premium Income ETF
JPMorgan Equity Premium Income ETF (NYSE:JEPI) generates income by investing in large-capitalization U.S. stocks and selling call options. The ETF tends to underperform during bull markets and protects investors from huge losses during bear markets, as the majority of the portfolio is made up of large, defensive stocks like Trane Technologies PLC (NYSE:TT), Southern Co (NYSE:SO) and Progressive Corp (NYSE:PGR). The Redditor said about 5% of his portfolio is allocated to JEPI.
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This article Dividend Investor Who Earns $21,903 Per Year Shares His Top 10 Portfolio Stocks originally appeared on Benzinga.com
