Go Dividend Hunting With This ETF
No investor should underestimate the importance of dividends in a portfolio and that's what made 2009 a painful year for dividend hunters. S&P 500 dividends fell by more than 21%, or $52.6 billion, but most analysts are forecasting dividend growth for, albeit small, U.S. stocks in 2010.
That could mean taking a look at dividend ETFs like the iShares Dow Jones Select Dividend Index (NYSE: DVY) is a good idea. After all, the S&P 500 dividend yield is just 2.1%, below its historical average, but better than what you'd get with Treasuries or other cash investments.
Consider that DVY now yields over 4% and the choice is clear. DVY holds a basket of familiar dividend payers like Chevron (NYSE: CVX) and Kimberly Clark (NYSE: KMB) along with high yielders such as CenturyTel (NYSE: CTL) and Lorillard (NYSE: LO).
It is likely that the worst of the dividend cuts are behind us and that many big-name firms will be boosting their payouts in 2010, so consider DVY an ETF to watch this year.
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