It is the dream of many investors: thanks to good dividend stocks and dividend ETFs, earn high returns and get a lot of money in your account. We show how this can be done.
If you invest in good dividend stocks for a few years, you will receive nice returns after a short time. However, it is important not only to pay attention to the level of the dividend yield today, but also to long-term dividend growth.
Dividend strategy with stocks
Because stocks like BASF or Allianz have been increasing their dividends for years, thus ensuring that investors’ personal dividend yields also increase.
In the article 1,000 euros dividend per month – with these shares we show which German and American companies regularly increase their dividends. Also, here’s a roadmap for investors to earn a handsome dividend every month of the year.
In addition, when it comes to the dividend strategy, it is important to create a good mix of an already high dividend yield and good growth. A good example of this is McDonalds stock. That’s because the fast-food stock’s dividend yield has rattled between about 2 percent and about 3 percent since 2004, which isn’t bad, but it’s not great either. But over the same period, the dividend has increased tenfold in dollar terms, from $0.55 per share to $5.66 per share. Here, investors were able to benefit from both a nice price increase and an immense dividend growth.
But how can this be achieved with ETFs?
Check here whether you are currently with the cheapest and best broker for you.
Dividend strategy with ETFs
Investors can also rake in big dividends with ETFs. With this product, for example, a dividend yield of 12.5 percent is currently possible.
But even normal ETFs such as those on the DAX, the S&P 500 or the MSCI World offer nice dividend yields. This can be very worthwhile, especially for long-term savings plan investors. The total dividend paid by companies in the DAX has multiplied from EUR 10.8 billion in 2004 to EUR 50.6 billion in 2022. Investors who own an ETF on the DAX also benefit from it.
But investors can also pursue a real dividend strategy with ETFs and, above all, rely on dividend ETFs. With these ETFs, some of which offer a dividend yield of more than 5 percent, investors can collect 500 euros in dividends every month with these dividend ETFs.
In any case, it is important for investors when it comes to the dividend strategy: rely on good stocks or ETFs that not only pay good dividends today, but are likely to continue to do so in the future. Investors shouldn’t ignore dividend growth in particular. If you invest today in a stock that offers a 2 percent dividend yield and increases this payout by 8 percent every year, the dividend yield compared to the initial price is already 4.31 percent after ten years and even 9.32 percent after 20 years.
By the way: Here you will find the best dividend funds and dividend ETFs with high payouts
