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Dividends have always been tempting for investors looking for a regular income stream, especially when the stock market is volatile and inflation is high. But reaching a decent dividend income target isn’t easy: you have to add reliable dividend stocks and ETFs in your portfolio with significant yields as well as strong fundamentals.
About nine months ago someone asked Redditors on r/Dividends how to earn $2,000 per month in dividends. The response was prolific, with many investors sharing their portfolios and secrets. In the discussion thread, a Redditor claimed he’s making about $21,903 annually in dividends with 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 purely for informational purposes and are based on an income report/comment shared by an investor on Reddit. These are not recommendations or investing advice.
SPDR Portfolio S&P 500 High Dividend ETF
The investor who shared his portfolio details claiming to be earning over $21,000 per year in dividends annually said that about 25% of his portfolio is allocated to SPDR Portfolio S&P 500 High Dividend ETF (NYSE:SPYD) that yields over 4% and tracks the total return performance of the S&P 500 High Dividend Index. Some of the top holdings of the fund include Kellanova, Public Storage, Hasbro and Simon Property, among others.
Schwab US Dividend Equity ETF
Schwab US Dividend Equity ETF (SCHD) is another top dividend ETF in the portfolio of the Redditor who claimed to be making $21,903 per year in dividends. SCHD tracks the Dow Jones U.S. Dividend 100 Index and gives investors exposure to some of the top dividend stocks trading in the U.S., including Home Depot, Coca-Cola, Verizon, Lockheed Martin, Pepsi, and AbbVie, among many others. This ETF can be ideal for investors looking for higher total returns instead of just dividend income.
Realty Income
About 10% of the Redditor’s dividend income portfolio earning 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 an over 5% yield. Realty Income Corp has increased its payouts for 30 straight years. It posted strong quarterly results earlier this month and affirmed guidance. With interest rate cuts around the corner, Realty Income’s Corp (NYSE:O) business is expected to see growth as most of the company’s biggest tenants are retailers that were negatively impacted by rate hikes.
Amplify CWP Enhanced Dividend Income ETF
Amplify CWP Enhanced Dividend Income ETF (NYSE:DIVO) generates monthly income by selling covered calls. Some of the top holdings of the ETF include UnitedHealth, JPMorgan, Caterpillar, Home Depot and Procter & Gamble. The ETF has over $3.4 billion in assets and has gained much popularity 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 increased to $19,970 vs. $19,614 for SPY with dividends reinvested. As of Aug. 28, the ETF yields about 4.5%.
Main Street Capital
Another monthly dividend stock in the portfolio earning over $21,000 a year in dividends, Main Street Capital Corp (NYSE:MAIN) is a business development company. The company never reduced 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 gaining exposure to top companies outside of the U.S. and Canada. The ETF tracks the Dow Jones EPAC Select Dividend Index and yields about 6%. Some of the top holdings of the fund are 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 this stock. Last month Stag Industrial reported better-than-expected second-quarter results. FFO in the quarter totaled $0.61, beating estimates by $0.02. Revenue rose about 10.5% year over year to $189.78 million, surpassing 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 about 8% and distributes monthly dividends. Some of the top holdings of the fund 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 earning about $21,000 annually in dividends. The ETF invests in Nasdaq companies and generates extra income by selling call options.
JPMorgan Equity Premium Income ETF
JPMorgan Equity Premium Income ETF (NYSE:JEPI) generates income by investing in large-cap U.S. stocks and selling call options. The ETF usually underperforms during bull markets and protects investors against huge losses during bear markets since most of its portfolio consists of large, defensive equities 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 Holdings originally appeared on Benzinga.com
