There are plenty of places an investor can look to find a list of dividend paying stocks. There are published lists like the S&P 500 dividend aristocrats that can give you a quick glance of the top dividend paying stocks available. An investor can also run their own stock screen to build a solid list of high yielding stocks that could lead to potential investments.
There is another option that will allow investors to effectively identify a list of quality stocks that pay dividends with very little effort. Reviewing ETF dividend paying stocks can help investors build their own list by reviewing the top holdings within the fund. The hardest part of the process is finding the ETF’s (also known as Exchange Traded Funds) that deliver high yields. Once you have identified a few top ETF dividend paying stocks, take a look at the top holdings to build your list.
Reviewing ETF Dividend Paying Stocks
As a quick exercise, let’s review the holdings of 5 popular ETF dividend paying stocks. The list that we will review includes the following ticker symbols – SDY, DVY, PEY, PFM, and FVD.
Now that we have identified the 5 ETF stocks we plan to analyze, the next step is to review the top holdings. Most online financial websites will provide data on the top holdings of an ETF. You could also check with your online discount broker for this information.
After pulling the top 10 holdings of each ETF identified earlier, we have found 41 dividend paying stocks to add to our list. Please keep in mind that the list of dividend paying stocks will change frequently based on the market and the direction of the ETF. Our analysis returned a few top dividend performers including – AT & T (T), Coca Cola (KO), United Technologies (UTX), and WalMart Stores (WMT) to name a few.
After reviewing the list of 41 dividend paying stocks, there are 6 that appear as a top holding in more than one ETF. Here is the list of the 6 dividend producing stocks that were found on more than one ETF -
- Chevron Corp. (CVX) – Found on 2 ETF’s
- Cincinnati Financial Copr. (CINF) – Found on 2 ETF’s
- Integrys Energy Grp (TEG) – Found on 2 ETF’s
- Leggett Platt Inc. (LEG) – Found on 2 ETF’s
- CenturyTel Inc. (CTL) – Found on 3 ETF’s
- PPG Ind (PPG) – Found on 3 ETF’s
Due Diligence
Now that we have identified our list of dividend paying stocks, is time to run out and buy all of them? The answer is – NO! Whether you get your list of possible investments from ETF’s, tips from other investors, the news, etc. – you must still complete your own due diligence on the stock. It is ultimately your decision to invest in a stock. Making lists of dividend stocks are great, just make sure you don’t rush out and purchase every stock blindly.
How do you build your list of dividend paying stocks?
