Do you need some regular cash flow from (or for) your investment portfolio? In the long run, dividend stocks are likely to be your best bet. Most of these names not only regularly raise their per-share payments, but these stocks themselves have the potential for much-needed price appreciation. Even income-seekers need some capital growth too!
But how much dividend income can you generate with, say a quarter of a million dollars? At the risk of sounding coy, it depends. Apple (AAPL 2.12%) technically pays a dividend, but with a dividend yield of only 0.4%, a $250,000 holding would only produce about $1,000 worth of annual dividend income. That's not much.
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A stake of this same size in Kraft-Heinz (KHC 1.73%), on the other hand, would generate nearly $16,900 worth of yearly dividend income thanks to its yield of 6.9%. However, this stock's quarterly dividend payment hasn't budged since being reduced all the way back in 2019, and the stock has performed miserably that whole time.
A reasonable and sustainable dividend yield at this time is one offered by an instrument like the iShares Select Dividend ETF (DVY +0.01%), which holds a basket of 100 high-quality blue chip stocks with a minimum of five years' worth of consistent dividend payments.
NASDAQ: DVY
Key Data Points
Some of its holdings include tobacco giant Altria, utilities outfit Edison International, and food company Archer Daniels Midland. Its current dividend yield stands at 3.7%, which is enough to drive $9,250 worth of annual dividend payments with a $250,000 position.
Perhaps just as important, this ETF's dividend is likely to grow over time, as will the initial quarter-million-dollar stake. In the long run, that may be a much bigger deal to income-minded investors.
