Here's How Many Shares of the SPDR Portfolio S&P 500 High Dividend ETF (SPYD) You'd Need for $500 in Yearly Dividends
Key Points
Dividends are the passive income you receive from owning stocks or ETFs.
SPYD tracks the top 80 high-dividend-yielding companies in the S&P 500.
At SPYD's current yield, you'd need to own over 250 shares.
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One of the better parts of investing in stocks is the passive income you can receive from owning dividend stocks or exchange-traded funds (ETFs). It's a way of receiving value from your stocks without relying solely on stock price appreciation, though both are appreciated.
A popular go-to dividend ETF is the SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD), which has a trailing yield of 4.46% at the time of this writing. At that yield, you'd need to own about 256 shares of SPYD to receive $500 in annual dividend income. At its current price of $43.86 per share, that would cost you around $11,210.
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SPYD's 4.46% dividend yield is among the higher yields you'll find in a broad dividend ETF, but it makes sense given that the ETF tracks the top 80 high-dividend-yielding companies in the S&P 500 (an index of the 500 largest American companies).
By investing in a high-yielding dividend ETF like SPYD, you get a payout that's close to four times higher than the S&P 500 average, exposure to 78 companies spanning all 11 major U.S. sectors, and a cheap ETF whose expense ratio is only 0.07%. The latter works out to paying only $0.70 per $1,000 invested in SPYD, which is easily made up by the dividends you receive.
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Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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