Should I invest in high dividend ETFs or individual stocks?

Asked 3 years ago

This is a dividend ETFs vs individual stocks question. I'd like to know which of the options is better for passive income? I have some high-dividend yield stock favorites in mind, but I'm afraid that they're less reliable than ETFs. What are your opinions on this?

Investment advice Dividend etfs Building investment portfolio Single stocks

Andrew Moran

Tuesday, October 05, 2021

Depending on how much you are willing to invest and what your goals are, the best way to manage this conundrum would be a strategy of one ETF and two individual stocks (as long as they do not overlap).
For example, if I am starting out and looking to build a portfolio, here is what I would do:
Schwab U.S. Broad Market ETF (SCHB)
06/21: $102.79
Yield: 1.4%
Top Holdings: Apple, Microsoft, Amazon, Facebook, and Alphabet
The Kraft Heinz Company (KHC)
06/21: $40.83
Yield: 3.93%
Suncor Energy (SU)
06/21: $24.49
Yield: 2.85%
You would be swimming in handsome dividend payments every three months. If you are interested in monthly dividends, there are other ETFs, REITs, and individual stocks that pay out at the end of the month (Pembina Pipeline, for example).