https://www.lazyportfolioetf.com/etf/vanguard-high-div-yield-vym/ (2024)

FAQs

What is the average dividend yield for VYM? ›

Vanguard High Dividend Yield ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.

In the last 30 Years, the Vanguard High Dividend Yield (VYM) ETF obtained a 9.18% compound annual return, with a 14.46% standard deviation. In 2022, the ETF granted a 2.93% dividend yield. If you are interested in getting periodic income, please refer to the Vanguard High Dividend Yield (VYM) ETF: Dividend Yield page.

When is VYM dividend payment date? VYM's next quarterly payment date is on Mar 22, 2023, when VYM shareholders who owned VYM shares before Mar 19, 2023 received a dividend payment of $0.72 per share. Add VYM to your watchlist to be reminded of VYM's next dividend payment.

What Is a Good Dividend Yield? Yields from 2% to 6% are generally considered to be a good dividend yield, but there are plenty of factors to consider when deciding if a stock's yield makes it a good investment.

Cons. No guarantee of future dividends. Stock price declines may offset yield. Dividends are taxed in the year they are distributed to shareholders.

Many investors look to dividend-paying stocks to generate income in addition to capital gains. A high dividend yield, however, may not always be a good sign, since the company is returning so much of its profits to investors (rather than growing the company.)

Should I buy dividend stocks or ETFs? ›

Dividend ETFs or Dividend Stocks: Which Is Better? Dividend ETFs can be a good option for investors looking for a low-cost, diversified and reliable source of income from their investments. Dividend stocks may be a better option for investors who prefer to choose their own investments.

Vanguard ETFs are noted in the industry for their lower-than-average expense ratios. Most of Vanguard's ETF products pay quarterly dividends; some pay annual dividends; and a few pay monthly dividends.

Investors with $1 million to $5 million*

You're a Flagship client at Vanguard, which means you get personalized services reserved for our high-net-worth investors. Helping you look at your wealth holistically is important to us.

Performance: Over the long term, VIG has delivered relatively stable returns, with a focus on dividend growth, while VYM has delivered higher yields but with more volatility.

Dividend ETFs may also be a good option for investors who want exposure to a diversified portfolio of dividend-paying stocks but do not have the time or expertise to research and pick individual stocks themselves. However, it's important to note that dividend ETFs are not risk-free investments.

Healthy. A range of 35% to 55% is considered healthy and appropriate from a dividend investor's point of view. A company that is likely to distribute roughly half of its earnings as dividends means that the company is well established and a leader in its industry.

VYM Dividend Information

VYM has a dividend yield of 3.14% and paid $3.31 per share in the past year. The dividend is paid every three months and the last ex-dividend date was Mar 20, 2023.

No stock in the S&P 500 has a higher dividend yield than independent oil and gas company Pioneer Natural Resources (PXD).

To make $5000 a month in dividends you need to invest between $1,714,286 and $2,400,000 with an average portfolio of $2,000,000. The exact amount of money you will need to invest to create a $5000 per month dividend income depends on the dividend yield of the stocks.

Anywhere between 2% and 6% can be considered a good dividend yield. A typical S&P 500 dividend yield in 2023 is between 1.61% and 2.09% — so a yield over 2% could be considered above average.

What is too high of a dividend yield? ›

Payout ratio

After you find this number, divide the total cash paid out in dividends over the past year by your chosen earnings metric for the same time period. Anything over 100% is a bad sign as it means a company is paying out more in dividends than it is generating in earnings.

For many retirees, dividend-paying stocks and ETFs provide income without a job. Often, they are for those who do not have time to monitor the market every second. They are suitable long-term investments since payouts are constant.

Market risk

The single biggest risk in ETFs is market risk. Like a mutual fund or a closed-end fund, ETFs are only an investment vehicle—a wrapper for their underlying investment. So if you buy an S&P 500 ETF and the S&P 500 goes down 50%, nothing about how cheap, tax efficient, or transparent an ETF is will help you.

ETFs are less volatile than stocks, so they do not give very high returns in a short period and similarly do not fall rigorously like stocks. ETFs are only for those who want slow and steady returns in the long term. For anybody expecting good returns overnight, an ETF is not a good option for you to invest in.

Dividend-paying Stocks

Shares of public companies that split profits with shareholders by paying cash dividends yield between 2% and 6% a year. With that in mind, putting $250,000 into low-yielding dividend stocks or $83,333 into high-yielding shares will get your $500 a month.

In a market that generates a 2% annual yield, you would need to invest $600,000 up front in order to reliably generate $12,000 per year (or $1,000 per month) in dividend payments.

Can an investor really get rich from dividends? The short answer is “yes”. With a high savings rate, robust investment returns, and a long enough time horizon, this will lead to surprising wealth in the long run. For many investors who are just starting out, this may seem like an unrealistic pipe dream.

What is the safest Vanguard investment? ›

Of the 3 main asset classes, cash is the safest, followed by bonds and then stocks. Safer investments also have lower average returns. By mixing investments, you can get a balance of both stability and growth potential.

Look for funds that have expense ratios below 1 percent. If you can handle the $3,000 minimum initial investment, I like the low-cost Vanguard Total Stock Market Index Fund and the Vanguard Total International Stock Index Fund (vanguard.com; 877-662-7447).

At age 60–69, consider a moderate portfolio (60% stock, 35% bonds, 5% cash/cash investments); 70–79, moderately conservative (40% stock, 50% bonds, 10% cash/cash investments); 80 and above, conservative (20% stock, 50% bonds, 30% cash/cash investments).

The Risks to Dividends

In other words, dividends are not guaranteed and are subject to macroeconomic as well as company-specific risks. Another potential downside to investing in dividend-paying stocks is that companies that pay dividends are not usually high-growth leaders.

Dividends are not guaranteed. A company may decide not to pay dividends any further. Alternatively, may choose to reduce their dividend. Another con of dividend investing for passive income is the eventual ceiling of returns.

Growth Investing

Unlike dividend investing, with growth stocks, money remains invested in the company and is not paid out in periodic intervals. Instead, all excess return generated gets reinvested back into the stock itself.

Briefly, in order to be eligible for payment of stock dividends, you must buy the stock (or already own it) at least two days before the date of record and still own the shares at the close of trading one business day before the ex-date.

Note that when you view dividend amounts on vanguard.com, these taxes will already have been deducted. On your tax forms, the total dividend amount (before taxes) and the amount of taxes deducted will be reported as separate line items.

To go from $500,000 in assets to $1 million requires a 100% return—a level of performance very hard to achieve in less than six years. To go from $1 million to $2 million likewise requires 100% growth, but the next million after that requires only 50% growth (and then 33% and so on).

Do wealthy people use Vanguard? ›

The median household in the study has over $1 million with Vanguard and those below the median have assets outside of Vanguard (i.e. real estate, non-Vanguard accounts, etc.) that make most of them millionaires as well.

Retiring at age 40 is entirely feasible if you have accumulated $5 million by that age. If the long-term future is much like the long-term past, you will be able to withdraw $200,000 the first year for living expenses and adjust that number up for inflation every year more or less forever without running out of money.

Vanguard High Dividend Yield ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VYM is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market.

The dividend yield ratio is the ratio between the current dividend of the company and the company's current share price – this represents the risk inherently involved in investing in the company. Investors seeking income from dividend stocks should maintain their concentration on stocks with at least a 3%-4% yield.

The average dividend yield on S&P 500 index companies that pay a dividend historically fluctuates somewhere between 2% and 5%, depending on market conditions. 5 In general, it pays to do your homework on stocks yielding more than 8% to find out what is truly going on with the company.

Basic Info. S&P 500 Dividend Yield is at 1.66%, compared to 1.74% last month and 1.37% last year. This is lower than the long term average of 1.85%.

A "good" dividend yield on cost is one that rises over time. Suppose in 2022 we invested $100,000 in Union Pacific (UNP) at $210 per share. The company paid annual dividends of $5.20 per share, resulting in an initial yield on cost of 2.48% and annual dividend income of approximately $2,476.

Can you live off dividend yield? ›

To live off of dividend income alone, you need to receive enough dividend payments each year to cover your expenses. Once you know how much income you need to cover your expenses, you can divide that by the average dividend yield of your portfolio to get a rough estimate of how much you need to invest.

A high dividend yield, however, may not always be a good sign, since the company is returning so much of its profits to investors (rather than growing the company.) The dividend yield, in conjunction with total return, can be a top factor as dividends are often counted on to improve the total return of an investment.

Dividends can be classified either as ordinary or qualified. Whereas ordinary dividends are taxable as ordinary income, qualified dividends that meet certain requirements are taxed at lower capital gain rates.

Both metrics are important for equities investors. While the dividend rate indicates total expected income, the dividend yield provides more information on the rate of return and can be useful in comparing different income-paying assets.

Current dividend yield vs market & industry. Notable Dividend: F's dividend (4.37%) is higher than the bottom 25% of dividend payers in the US market (1.63%). High Dividend: F's dividend (4.37%) is low compared to the top 25% of dividend payers in the US market (4.94%).

Many factors, including the overall market, interest rates and the individual company's financial situation, can influence dividend yields. But usually from 2% to 6% is considered a good dividend yield.

How many dividend stocks should I own? ›

There is no hard and fast rule for how many dividend stocks to start a portfolio, but a good starting point is to aim for a minimum of 10. This will give you a good mix of different companies and sectors and help to diversify your risk.