For investors looking for some recurring dividend income to add to their portfolios, finding the right dividend stock can be a painstaking process. Not only do you have to look at payout ratios and yields, but if you’re looking at stocks that pay monthly, you’re looking at a limited group of stocks as most pay quarterly.
However, that’s where the Ishares Diversified Monthly Income ETF (TSX:XTR) is a great option for income investors, as it can provide monthly payouts and give you a lot of diversification.
The fund holds a series of ETFs within it, and they give investors a mix of stocks that are both in the U.S. and Canada. However, it is mainly Canadian-based with a little less than one-third of the companies being out of the U.S.
Year to date, the fund has risen just 6% in value, but what makes it appealing is its dividend. The ETF is currently averaging a 12-month trailing yield of 5.4%. That’s a very high dividend given the balance and diversification that the fund offers investors.
With a management expense ratio of 0.62%, the ETF charges investors a similar fee to other Canadian ETFS. It’s also a very safe investment, being rated by Blackrock at a “low to medium” risk level, as investors are holding some of the best dividend stocks in North America with this fund.
That’s also indicative of its beta – which at 1.06 indicates that the ETF will move fairly consistently with the market.
If you’re looking for a mix of stability and dividend income, this ETF could be a great option to buy and hold for the long haul.
