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Top Paying Dividend ETFs for Long-Term Investors
If you're an investor looking for consistent income and long-term growth, dividend-paying ETFs are a solid addition to any diversified portfolio. They offer stability during market volatility, the potential for capital appreciation, and the power of compounding through reinvested dividends. But not all dividend ETFs are created equal. To help you narrow your focus, we've screened and ranked some of the best dividend ETFs with a yield of at least 2%, factoring in both their long-term reward-to-risk ratios (10-year) and 3-year Sharpe Ratios.
These ETFs are not just high-yielders — they also bring a balance of value, stability, and quality. Whether you're building a retirement portfolio, diversifying a taxable account, or simply seeking regular passive income, this list offers a range of options tailored to different investing styles.
Top Dividend ETFs (Yield ≥ 2%)
| ETF Name | Ticker | Yield |
|---|---|---|
| iShares Core Dividend Growth ETF | DGRO | 2.23% |
| Vanguard Mega Cap Value ETF | MGV | 2.26% |
| WisdomTree U.S. Total Dividend Fund | DTD | 2.08% |
| Vanguard Value Index Fund | VTV | 2.29% |
| Vanguard High Dividend Yield Index ETF | VYM | 2.86% |
| iShares Morningstar Large Cap Value ETF | ILCV | 2.03% |
| First Trust Value Line Dividend Index Fund | FVD | 2.33% |
| Invesco Variable Rate Preferred ETF | VRP | 5.84% |
| Schwab U.S. Dividend Equity ETF | SCHD | 3.97% |
| SPDR Portfolio S&P 500 Value ETF | SPYV | 2.16% |
Key Takeaways
1. SCHD and VYM Lead in Quality and Yield: SCHD (3.97%) and VYM (2.86%) stand out for combining high dividend yield with a disciplined focus on quality companies. SCHD screens for companies with strong balance sheets, while VYM tracks high-yielding stocks within the broader U.S. market.
2. VRP Offers Yield, But Comes with Interest Rate Risk: With a yield of 5.84%, VRP — which focuses on variable rate preferreds — offers strong income potential, but it's more sensitive to interest rate fluctuations and credit risk. It's best suited for more risk-tolerant income seekers.
3. DGRO and DTD Focus on Growth-Oriented Dividends: DGRO invests in companies that have consistently grown their dividends, while DTD offers exposure to the total dividend-paying universe. Both are excellent choices for a balanced approach between yield and growth.
4. Value-Oriented ETFs Like VTV, MGV, and SPYV: These ETFs focus on large-cap value stocks, which historically outperform during rising rate environments and market downturns. Their consistent yield above 2% adds an attractive income layer.
Why Dividend ETFs Matter in a Long-Term Portfolio
Dividend ETFs not only generate income, but they often exhibit lower volatility, higher risk-adjusted returns, and better performance in bear markets. By focusing on ETFs with solid Sharpe Ratios and long-term risk/reward profiles, you're stacking the odds in your favor. Additionally, ETFs like SCHD and VYM offer dividend reinvestment options (DRIP), allowing investors to benefit from compounding over time.
Whether you're a retiree looking to live off your portfolio, or a younger investor reinvesting dividends to build wealth, this list offers a strong starting point.
As always, do your due diligence, consider your risk tolerance, and consult with a financial advisor when necessary before investing.
