It may surprise you that in 2021, the technology sector was the largest payer of dividends among sectors in the S&P 500 Index, according to investment research firm CFRA.
Tech stocks contributed more than 17% of the overall income for the broad-market benchmark. That's more than the contribution from healthcare (15%), financials (14%) and consumer staples (11%), notes CFRA.
And yet, many exchange-traded funds that invest in companies with a track record of hiking dividends have relatively limited exposure to tech. The ProShares S&P 500 Dividend Aristocrats (NOBL), for example, which tracks an index requiring firms to have posted at least 25 consecutive years of dividend increases, holds 1.5% of assets in tech, compared with 22% in consumer staples.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The ProShares S&P Technology Dividend Aristocrats (TDV) holds 77% of assets in tech stocks. Tracking an index that requires a minimum of just seven years of dividend hikes allows the fund to home in on tech names with the wherewithal to consistently return cash to shareholders. Holdings are equally weighted, so behemoths with giant market values can't dominate. The 40 stocks in the portfolio range from household names such as Apple (AAPL) and Broadcom (AVGO) to water-meter manufacturer Badger Meter (BMI) and pet pharmacy PetMed Express (PETS).
The ETF, yielding 1.2%, might be worth a look by dividend investors who want to balance out sector exposure or by tech investors who prefer the cushion of a dividend in an often-volatile sector.
-
New $6,000 'Senior Bonus' Deduction: What It Means for Taxpayers Over Age 65Tax Changes If you’re an older adult, a new bonus tax deduction could provide a valuable tax benefit. Here's how it works.
-
Walmart Plus Members Will Soon Have Their Choice Between Two Streaming ServicesDiscover which streaming service is coming to the platform.
-
Big Tech Names Rise Above Broad Weakness: Stock Market TodaySome familiar names enjoyed solid rallies on the resolution of outstanding questions, but macro uncertainty hangs over the broader market.
-
Stocks Slide to Start September: Stock Market TodaySeasonal trends suggest tough times for the stock market as we round into the end of the third quarter.
-
Stocks End Strong Month on a Down Note: Stock Market TodayThere was likely a bit of profit-taking ahead of a historically weak September.
-
S&P 500 Tops 6,500 Even as Nvidia Slips: Stock Market TodayThe world's most valuable company closed lower after earnings, but the S&P 500 managed to notch a new record high.
-
Stocks Edge Higher With Nvidia, Fed in Focus: Stock Market TodayThe AI bellwether reports earnings after today's close, while Wall Street is keeping a cautious eye on President Trump's attacks against the Fed.
-
President Trump Makes Markets Move Again: Stock Market TodayThe White House is moving ahead with plans to reshape the Federal Reserve and to buy shares in more sectors and stocks.
-
Stocks Struggle to Start Nvidia Week: Stock Market TodayAnother important week for the stock market starts on a risk-off note.
-
Dow Rips 846 Points to New All-Time High: Stock Market TodayFed Chair Jerome Powell seems ready to cut interest rates in the fall but will still rely on incoming economic data about inflation and employment.
