Looking for Solid S&P 500 Stocks with Yield? Based on This ETF, You Might Not Find Many.

Core Insights - The article discusses the appeal of investing in dividend-paying stocks, particularly within the S&P 500 Index, highlighting their potential for long-term capital gains and regular income through dividends [1][2]. Group 1: Dividend Stocks Performance - Dividend stocks have historically been a popular investment strategy, but recent performance has been disappointing, with many stocks underperforming the S&P 500 [3]. - The SPDR S&P 500 High Dividend Portfolio ETF (SPYD) focuses on high-yielding stocks but has struggled to find worthy long-term investments, evidenced by a -9% annualized alpha [4][5]. Group 2: SPYD ETF Characteristics - SPYD holds approximately 80 of the highest-yielding stocks in the S&P 500, with a current yield of 4.5%, significantly higher than the S&P 500's low-1% range [5]. - The ETF has a low expense ratio of 0.07% and trades at under 12 times earnings, indicating potential value [5]. - With $7.7 billion in assets, SPYD is large enough to be significant but not overly large, providing decent long-term upside with a beta around 1.00 [5]. Group 3: Investment Outlook - Despite the current market conditions, the article suggests that fundamentally sound dividend stocks could still offer solid price gains over the next 3-5 years [6]. - A review of the holdings in SPYD indicates that many do not meet the criteria for long-term equity investing based on their weak performance [7].