Dividend paying ETFs

Can anyone recommend any good ETF’s which actually pay dividends monthly?

Searching on the word monthly brings up 4 answers. Eg NMSI, SMIF

Which one would you recommend from those?

Sorry, can’t recommend. I am happy with reliable quarterly dividends from companies like PEP, ABBV, PG, JNJ, MSFT, BMY, KO, etc. Choose 3 carefully and you can get a dividend from one each month. I have all these in my portfolio yielding over 4%

MO
T
CVX
HRB
PM
IBM
PSX
ABBV
FFBC
KHC
VZ
SO
PFE
COP
DUK
USB
FITB
GIS
KO
MRK
MMM
UL
CSCO
BMY
SJM
PEP
ADM
AFL

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It might depend on the simplicity you are looking for, but you could also look at finding 3 quarterly dividend paying ETFs.

To be honest, they’re probably not a bad investment right now with a lot of companies suppressing their dividend payments due to the current situation, but ultimately sound companies with strong balance sheets.

IUKD wouldn’t surprise me if it hit 700-750p by the end of this year, so a 10% capital gain and a growing dividend.

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I have that monthly etf it’s not too bad actually.

Which other ones do you like?

To be honest, I’m more a ‘total return’ type person rather than Dividends. I no longer hold IUKD.

I’ve never been great with maths. To calculate a portfolios total dividend yield, sum of all the dividend yields / number of instruments?

Spot on, providing you hold the same £value of each stock.

Sum all the annual dividends and divide by total portfolio value.

Out of curiosity as I see MO and PM, why have you avoided BTI? :slight_smile:

Good question. These are legacy positions bought long ago whose value is now 95% capital gains, so I have continued to hold them to avoid the capital gains tax charge that selling would incur. But my plan is to now donate these holdings to charity which will avoid the capital gains tax charge. (When I donate £1000 of stock of which 900 is capital gains, I save 180 in capital gains tax and 456 in income tax, so that makes such giving very efficient.)

I have gone back and forth in my mind about whether I want to own tobacco stocks. I think I would rather not. The industry is in decline. However, opinions vary. Terry Smith holds Philip Morris for Fundsmith and thinks it is a good business; government regulation has increased its moat and reduced advertising costs. (It will be interesting if the government regulation ends ups strengthening Facebook similarly.)

Both MO and PM pay very high dividends. I wonder with what I could replace them? I do not necessarily prefer dividends over capital gains, though it is nice to have dividends coming in every week, and providing funds for reinvestment. Of my high dividend yielding stocks I guess I will add to ABBV, VZ, PEP, BMY.

Thanks for commenting. In case you’d like to comment more, here is a full list of my US stocks (ignoring small holdings inside pies). I think I can give a reason for each being a buy or hold, rather than a sell.

AAPL, ABBV, ABT, ADBE, ADM, ADP, AFL, AMD, AMGN, AMZN, APD, ARW, BLK, BMY, CARR, CDK, CINF, CL, CLX, CMCSA, COP, CSCO, CVS, CVX, CWT, DG, DIS, DUK, EL, EMR, EXPE, FB, FFBC, FITB, GE, GIS, GOOG, HON, HRB, HSY, IBM, INTC, INTU, J, JNJ, JPM, KHC, KO, KSU, MA, MAR, MCK, MDLZ, MDT, MMM, MO, MRK, MSFT, NEE, NFLX, ORCL, OTIS, PEP, PFE, PG, PM, PSX, QCOM, RTX, SBUX, SJM, SO, SYK, T, TMO, UAA, UL, UPS, USB, V, VTRS, VZ, WIX, XOM, ZBH

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This isn’t case for me, how do I calculate now? Thanks

sum_i stockvalue(i) stockyield(i)
/ sum_i stockvalue(i)

I also got recommendations for tobacco stocks when doing my initial research to enter the market but didn’t want any part of them and so have avoided them. there is money there but its not exactly positive and the size of the pool in theory keeps getting smaller, they just keep charging more to earn the same. I also haven’t invested into any alcohol companies yet, but would consider doing so later if only because everyone needs a little bit of luxury (whisky/scotch/cider) in their life :wink:

loved holding PEP, but I was missing out on some growth opportunities the last year so moved out of the position for now. will try and have some funds set aside for the next value buy moment.

I don’t recognise all of the tickers, I may try and have a more detailed look at those that I don’t recognise.
Nonetheless, I looked at Otis not too long ago.
Did you buy this or did you get shares as part of the spin-off?
If you don’t mind me asking, what are your thoughts on the company?

I am interested in both Otis and its spanish subisidiary, Zardoya Otis which trades at a much lower P/E (around 18 instead of around 28), so I thought it might be useful to know your thoughts on the main stock (USA).

My overall thoughts is that it has a very good business, however the growth rate does not quite justify the price to earnings ratio. I would probably give it a “hold” rating and keep it on a watchlist, but interested to know what you think.

I received OTIS through demerger of UTX into RTX, OTIS and CARR. CARR has done best of the three. I guess people who are locked down need to upgrade their home ventilation systems. I am sitting on gains, so I will hold until I am ready to sell some losing position to offset. I think of OTIS is one of those somewhat boring businesses whose products will always be in demand. They earn a lot from servicing. Similar is KONE, a stock in the Fundsmith universe. So I view it as a safe stock that will pay reliable dividends and never lose me much money.

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Thanks for your reply.

Yes, I thought so. The spin-off or demerger (I don’t know what the exact term is) was earlier this year.
I agree, the business is pretty good and very safe. Lifts will still need to be maintained, and any new multi-storey buildings will require lifts. Same for Kone, it is just that I can’t see the growth justifying the high multiples.
I might buy Zardoya Otis though, as its multiples are lower, although as it is a subisidiary its potential may be lower.

Thank you for the suggestion that I look at this more closely.

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Just one thing to consider, the spanish stock market overall is currently out of favour compared to markets in other EU countries like the Netherlands or Germany due to the overall economy. The main index, the Ibex-35, is quite far from its 2007 peak, so it may stay depressed for a long time.