Suggestions for generating dividend income?

While I know that asking investing advice on a truck forum is I believe the 9th or so sign of the decline of modern civilization, I'm all for its collapse (viva la revolution!). So here goes.

I recently inherited a significant (at least to me) sum of money. I'd like to take advantage of that money and generate noticeable passive income, specifically dividend income. I'm partial to vanguard funds, and I currently own a little bit of VYM, VOO and VTI. VYM has "high dividend yield" in it's name for crying out loud... but I was curious if anyone can offer other suggestions (vanguard or other) and or schemes to maximize dividend income. I've found a couple of models of investment portfolios that try to maximize annual dividend yields... but it seems like it is less than what VYM would provide.

 

Covered call etfs. But right now high volatility might make them ineffective

 

Look into individual stocks. KO pays ~2.75 plus the basis price gain.

 

3M is on sale right now and they're 1.49 quarterly. They've got a good history of raising it.

 

Please speak to a tax specialist so that if there any taxes owed resulting from this inheritance, they are paid on time and w/o penalty. With the market doing what it's doing now, I wouldn't want to see you buy in, have the market fall, then need to sell in order to pay the tax man. You'd have been better off in this scenario if you left the money in a checking account...

But assuming the tax man is at bay, and you only want to generate dividend income, look around at the companies that make / sell stuff that people use everyday hell or high water, and buy into those companies.

Currently in my portfolio I have: CNP, ED, GIS, SHEL (Formally RDSB), GIS, O, T, UL, VZ which pay quarterly. O pays monthly. I bought a lot of this stuff when the market tanked in '07-08 ish.
I am generating almost 30k / yr in dividend income. Half of the investments are DRIPping.

 

Funny I am working on building something similar. For me it depends on what the account is for. Retirement is primarily VTI with a small amount of VWO and VEU. In my brokerage account I am going for vale/dividend yield.

My core holding of my dividend portfolio is VYM, its yield isn't sexy but it is low risk relative to any single stock. As for individual stocks I am currently in ABBV, C, IBM, MO, PM, and VZ. Taking a good long look at 3M right now. The most important thing to watch out for in dividend stocks are "yield traps". Make sure you analyze the earnings and cash flows to see if the dividend they are paying is sustainable and reasonable. If it has been dropping a lot lately, which pushes the yield up, make sure you look for any events that happened that could impact the earnings or cash flows significantly.

If you feel like you are in over your head there is no shame in going to a CFP/CFA. Just don't let them push around what your goals are. If you are on the younger half of life you are likely to hear something like "At your age you should be focused on growth, not dividend yield." They should help you accomplish what you want, not what they think you need.

 

This is my current thought process... something low risk to generate a number with a comma in it (to pay for a slip for my boat. ha).

 

To close this loop and satisfy the archives. I'm currently working with a financial advisor on building a portfolio to create dividend yield based on a yearly take home goal.
I still may put some significant to me money into VYM as a side hustle, pending other plans.

 

Good thinking. Find those dividend aristocrats and trust they’ll keep doing their thing. Relying on high yield REITs leaves you likely to experience significant dividend cuts when the going gets tough. Right @Boyk1182

 

A good dividend reinvestment, DRIP stock is now at a sale price. JPMorgan JPM.
It will re-invest your dividend and buy more shares. I held it for many years and
did good with it. YMMV

 

Anyone looked into ET? I've started putting into that basket. highest div/yield I've seen at 6.01.

 

Don’t chase yield. Payouts may not be sustainable. Ensure that the payout in absolute terms is historical, and that the high yield you see today is based upon a depressed stock price. My buys for T and VZ back in 08 were based on a market that was just plain down.

 

Thanks for sharing your info and experience

 

International Business Machines Corp. (IBM) boasts a 4.8% dividend yield, as of February 9.(GETTY IMAGES)

Income investors often turn to bonds for yield, but with interest rates so low for so long, the stock market can sometimes be a better option. Many stocks offer better payoffs than a 10-year Treasury, which only recently eclipsed 2% for the first time since 2019.

However, dividend yields themselves don't mean much if they aren't sustainable. That's why being a member of the dividend aristocrats is such a distinction: There are 65 members of the S&P 500 that haven't just paid dividends for at least 25 consecutive years – they've raised their dividends for a minimum of 25 straight years.

Just these two requirements – that a stock must be a member of the vaunted S&P 500 and that it has a record of 25 years' worth of dividend increases – alone are stringent enough screens to guarantee investors are looking at a list of strong, reliable companies.

But the requirements go even further, with the following attributes also mandatory for membership on the dividend aristocrats list:

• Companies must be worth at least $3 billion at the time of each quarterly S&P 500 rebalancing.
• Average daily trading volume of at least $5 million for the trailing three-month period before each quarterly rebalancing date.

[
READ:

Sign up for stock news with our Invested newsletter. ]


The rebalancing of the index happens every January, April, July and October. New entrants are added and old ones removed once a year – unless a stock is removed from the S&P 500 index itself, in which case the company would be simultaneously removed from the dividend aristocrats list.

It's important to keep in mind the goal of the index when looking it over: It's constructed to be a well-diversified, lower-volatility group of stocks boasting both dividend income and capital appreciation potential.

S&P Dow Jones Indices, the index owner, notes that almost one-third of total equity market returns since 1926 have come from dividends and that its selection criteria and diversification requirements make the dividend aristocrat stocks uniquely positioned to do well as a group.

[
SEE:

9 Highest Dividend-Paying Stocks in the S&P 500 ]


On the issue of diversification, the aristocrats index has a floor on membership at 40 companies – a level in no danger of being breached anytime soon, given that the current group consists of 65 stocks.

SPONSORED

Meet with a Financial Advisor with U.S. News Financial Connect’s Service

Selecting a Financial Advisor is one of the most important steps you can take to maximize your financial freedom. The right investment plan for you is tailored to your long term needs and risk levels. Let U.S. News help match you for free with a financial advisor.


The index also caps the weighting of any single sector at 30%, limiting the impact of any sector's potential hit on the broader portfolio if one corner of the market plunges.

To that end, while investors could certainly try to adopt their own "smart beta" strategies to eliminate the less alluring members of the group, it's a much lower-effort endeavor to simply buy the entire group as a whole, which is possible due to the existence of dividend aristocrats exchange-traded funds, or ETFs, that track the portfolio.

The ProShares S&P 500 Dividend Aristocrats ETF (ticker: NOBL) is the premier exchange-traded fund in the space, with $10 billion in assets under management and a reasonable expense ratio of 0.35%.

Here's a full list of all 65 S&P 500 dividend aristocrats and how long each has been increasing its payouts to shareholders. The list is current through January 2022.

(Read more after the table for information on recent additions and subtractions.)

COMPANY SECTOR YEARS OF DIVIDEND GROWTH DIVIDEND YIELD (AS OF FEB. 9)
3M Co. (MMM) Industrials 64 3.7%
A.O. Smith Corp. (AOS) Industrials 29 1.5%
Abbott Laboratories (ABT) Health care 50 1.5%
AbbVie Inc. (ABBV) Health care 50 4.5%
Aflac Inc. (AFL) Financials 39 2.5%
Air Products and Chemicals Inc. (APD) Materials 40 2.6%
Albemarle Corp. (ALB) Materials 28 0.7%
Amcor PLC (AMCR) Materials 39 4.2%
Archer-Daniels-Midland Co. (ADM) Consumer staples 48 2.1%
Atmos Energy Corp. (ATO) Utilities 35 2.6%
Automatic Data Processing Inc. (ADP) Information technology 47 2%
Becton, Dickinson & Co. (BDX) Health care 50 1.3%
Brown & Brown Inc. (BRO) Financials 28 0.6%
Brown-Forman Corp. (BF-B) Consumer staples 38 1.1%
Cardinal Health Inc. (CAH) Health care 35 3.6%
Caterpillar Inc. (CAT) Industrials 28 2.2%
Chevron Corp. (CVX) Energy 35 4.1%
Chubb Ltd. (CB) Financials 29 1.6%
Church & Dwight Co. Inc. (CHD) Consumer staples 26 1%
Cincinnati Financial Corp. (CINF) Financials 62 2.2%
Cintas Corp. (CTAS) Industrials 38 1%
The Clorox Co. (CLX) Consumer staples 46 3.2%
The Coca-Cola Co. (KO) Consumer staples 60 2.7%
Colgate-Palmolive Co. (CL) Consumer staples 60 2.2%
Consolidated Edison Inc. (ED) Utilities 48 3.7%
Dover Corp. (DOV) Industrials 66 1.2%
Ecolab Inc. (ECL) Materials 30 1.1%
Emerson Electric Co. (EMR) Industrials 60 2.1%
Essex Property Trust Inc. (ESS) Real estate 28 2.7%
Expeditors International of Washington Inc. (EXPD) Industrials 28 1.1%
ExxonMobil Corp. (XOM) Energy 38 4.3%
Federal Realty Investment Trust (FRT) Real estate 50 3.5%
Franklin Resources Inc. (BEN) Financials 41 3.7%
General Dynamics Corp. (GD) Industrials 31 2.2%
Genuine Parts Co. (GPC) Consumer discretionary 66 2.5%
Hormel Foods Corp. (HRL) Consumer staples 56 2.2%
Illinois Tool Works Inc. (ITW) Industrials 51 2.2%
International Business Machines Corp. (IBM) Information technology 26 4.8%
Johnson & Johnson (JNJ) Health care 60 2.5%
Kimberly-Clark Corp. (KMB) Consumer staples 49 3.5%
Linde PLC (LIN) Materials 29 1.4%
Lowe's Cos. Inc. (LOW) Consumer discretionary 48 1.4%
McCormick & Co. (MKC) Consumer staples 36 1.4%
McDonald's Corp. (MCD) Consumer discretionary 45 2.1%
Medtronic PLC (MDT) Health care 44 2.5%
NextEra Energy Inc. (NEE) Utilities 26 2%
Nucor Corp. (NUE) Materials 49 1.7%
Pentair PLC (PNR) Industrials 45 1.4%
People's United Financial Inc. (PBCT) Financials 29 3.4%
PepsiCo Inc. (PEP) Consumer staples 49 2.5%
PPG Industries Inc. (PPG) Materials 50 1.5%
Procter & Gamble Co. (PG) Consumer staples 66 2.2%
Realty Income Corp. (O) Real estate 27 4.4%
Roper Technologies Inc. (ROP) Industrials 29 0.6%
S&P Global Inc. (SPGI) Financials 49 0.8%
Sherwin-Williams Co. (SHW) Materials 43 0.8%
Stanley Black & Decker Inc. (SWK) Industrials 54 1.9%
Sysco Corp. (SYY) Consumer staples 42 2.3%
T. Rowe Price Group Inc. (TROW) Financials 36 2.9%
Target Corp. (TGT) Consumer discretionary 50 1.7%
VF Corp. (VFC) Consumer discretionary 50 3.2%
W.W. Grainger Inc. (GWW) Industrials 51 1.3%
Walgreens Boots Alliance Inc. (WBA) Consumer staples 46 3.8%
Walmart Inc. (WMT) Consumer staples 49 1.6%
West Pharmaceutical Services Inc. (WST) Health care 29 0.2%

 

if you want honest, no b.s. advice about dividend stocks, check out genexdividendinvestor on youtube.

i collect a lot of money each month by investing in quality companies.

 

mo paid today. cha ching!!!!!!