The best dividend stock exchange-traded funds (ETFs) have a few things in common. They tend to invest in well-established, financially healthy companies with strong balance sheets. They usually deliver dividend yields above average to their investors. And because they tend to focus on value-oriented stocks, dividend ETFs likely experience less volatility when the rest of the stock market gets choppy.
But before you buy a dividend stock ETF, it’s important to review its holdings and understand why it’s a good choice for your investment strategy. Two top-ranked dividend ETFs, the Vanguard High Dividend Yield ETF (VYM 0.43%) and the iShares Core High Dividend ETF (HDV +0.37%), have slightly outperformed the S&P 500 index year to date.
VYM Total Return Level data by YCharts
Both have strong advantages and can be a good choice for dividend-focused investors. But they take slightly…
