3 ETFs with healthy dividends

Exchange-traded funds offer a wealth of smart options for those investors on the hunt for solid yields.

Affordable returns
For investors who crave dividends, ETFs boast advantages: They provide diversified portfolios and rock-bottom costs (as low as 0.18%), and most use screens to avoid weak companies whose yields are high because their stock is collapsing. "Everyone is looking for yield, and the great thing with ETFs is that you've got so many good choices," says Tom Lydon, president of Global Trends Investments and editor of the ETF Trends website.

Despite rising investor interest, which is pushing up the price of many stocks with strong dividend payouts, 2012 could still be fruitful for yield seekers. S&P expects the year to see a new record in payouts, and the percentage of company earnings paid out as dividends, now less than 30%, remains low compared with the historical average of 52%. We've found three performers whose price/earnings ratios remain in line with their benchmarks, so you won't pay a king's ransom for solid yield.


By Amy Feldman, conributor @FortuneMagazine - Last updated January 30 2012: 5:25 AM ET
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