Hey, you — are you licking your wounds from a dividend stock that turned sour? You’re in good company; even seasoned investors find themselves caught off guard every now and then.
But, let’s face it, constantly screening a plethora of stocks, tracking earnings reports, and analyzing financials can be downright exhausting.
If you’re ready to bypass this heavy lifting while still reaping the benefits of dividend investing, it might be time to consider a strategic pivot.
Enter dividend exchange-traded funds (ETFs). These nifty investment vehicles do the grunt work for you, packaging a selection of dividend-paying stocks into a single, tradeable fund that you can buy like any other stock.
Whether you’re seeking a steady stream of income, growth potential via reinvested dividends, or a balance between the two, there’s likely an ETF that aligns with your financial goals.
Today, I’ve sifted through the offerings and handpicked three iShares ETFs that stand out, each bringing a unique approach to Canadian dividend investing.
XEI for high yields
If you’re looking for higher than average dividend income from your Canadian stocks, consider iShares S&P/TSX Composite High Dividend Index ETF (TSX:XEI), which isolates the highest-yielding 74 TSX listed stocks.
As of November 1, investors can expect a 5.54% trailing yield. As a bonus, XEI also pays monthly dividends. The ETF charges a reasonable 0.22% expense ratio, making it the cheapest on today’s list.
CDZ for dividend growth
If you’re more of a dividend-growth investor, the ETF to watch instead is iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (TSX:CDZ). This ETF currently holds 90 stocks that have grown dividends for at least five years in a row.
Compared to XEI, CDZ has a slightly lower 12-month yield of 4.27%, but historically, it has provided a better total return. However, it is more expensive, with a 0.66% expense ratio, so be aware of that.
XDV for dividend quality
I personally like iShares Canadian Select Dividend Index ETF (TSX:XDV). This ETF tracks the Dow Jones Canada Select Dividend Index, which holds 30 stocks screened for dividend growth, yield, and payout ratio.
What this means is that you get a potent combination of high dividend yield, dividend growth, and dividend quality in a single ETF. XDV pays a 5.03% 12-month trailing yield and charges a 0.55% expense ratio.