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Dividend stocks are making moves as investors seek dependable income sources amidst a new U.S. administration and renewed inflation concerns. Jenny Van Leeuwen Harrington, the CEO & Portfolio Manager of Gilman Hill Asset Management, recently made the case for income investing, saying S&P 500 dividends have grown 5.7% over the last five to six decades. She also believes dividend income’s potential to outpace inflation and its tax advantages make dividend stocks more appealing to average investors.
Earlier this month, a dividend investor shared his detailed income report and portfolio on r/Dividends, a Reddit community with over 650,000 members. The investor said he collected about $1,031 a month in dividend income. However, he was considering “chasing” high-yield stocks and solicited Reddit’s advice.
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“Finally hitting about $1,031/month in dividends. Been tracking everything and it got me thinking – what if I moved more into higher yield stuff?”
The investor, who asked Redditors to “talk me out of” pursuing high yields, said he was aware that chasing yields was “dangerous.”
“But with rates this high, seems like a good time to be aggressive. Anyone try this or am I being dumb,” he added.
Redditors poured in with advice and stock recommendations in response to this post. First, we will examine the investor’s top three holdings and then see what recommendations he received from fellow income investors.
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Schwab U.S. Dividend Equity ETF
The investor earning about $1,000 in monthly dividends had a $125,000 position in Schwab U.S. Dividend Equity ETF (SCHD). The stake generated about $353 per month. Schwab U.S. Dividend Equity ETF (SCHD) tracks the Dow Jones U.S. Dividend 100 Index and provides exposure to some of the top dividend stocks trading in the U.S., including Home Depot, Coca-Cola, Verizon, Lockheed Martin, Pepsi and AbbVie. Since SCHD’s holdings are mostly conservative dividend payers, it’s suitable for investors close to retirement looking for consistent dividend income.
