For income oriented investors, seeking out companies that not only pay a reliable dividend, but raise their dividend payouts over time, can be a difficult task.
Sorting through hundreds of companies to pick the right ones to place in a given portfolio is very time consuming, and knowing which companies to adjust or exclude over time, should said companies not meet one’s criteria, can be difficult as well.
For investors looking for a passive way to gain the same exposure, an excellent exchange traded fund (ETF) to consider is WisdomTree U.S. Quality Dividend Growth ETF (NYSE:DGRW).
This ETF actually works to target companies that are likely to raise their dividends in the future based on fundamental metrics, even if said companies have not traditionally raised their dividends in the past, or raised them in a reliable enough fashion.
This is perhaps the key reason I like this ETF – past dividend increases I do think are correlated with future dividend hikes (I prefer companies with at least ten years of consecutive dividend increases myself), but trying to find the “next dividend gem” could be very worthwhile, especially if income investors in the market today are not factoring in this dividend growth into their share price models.
Whether you’re actively picking stocks with dividend growth profiles, or looking to invest in an ETF like the WisdomTree U.S. Quality Dividend Growth ETF, I do believe this strategy is a winning one for long term investors seeking income.
Invest wisely, my friends.
