Core Insights - High-yield dividend ETFs are expected to perform well in 2026 as interest rates decline, attracting investors seeking higher yields [1] - The article highlights three specific ETFs: FT Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG), Amplify CWP Enhanced Dividend Income ETF (DIVO), and Invesco High Yield Equity Dividend Achievers ETF (PEY) [1] Group 1: ETF Performance and Characteristics - FT Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG) offers an 8% dividend yield and has an expense ratio of 0.75%, but has only returned 7.66% over the past five years [1] - Amplify CWP Enhanced Dividend Income ETF (DIVO) has a dividend yield of 6.13% and an expense ratio of 0.56%, utilizing a tactical covered call strategy while maintaining portfolio upside [1] - Invesco High Yield Equity Dividend Achievers ETF (PEY) provides a 4.43% dividend yield with minimal tech exposure (2.79%) and an expense ratio of 0.54%, making it resilient during market selloffs [1] Group 2: Market Context and Investor Behavior - The current economic environment, characterized by high inflation and stable Treasury yields, is driving investors towards high-yield assets as prolonged rate cuts are anticipated [1] - The demand for yield is expected to increase as inflation remains a concern, leading to a shift in investor focus from Treasuries to dividend-paying equities [1]

Core Viewpoint - The article highlights three modestly priced stocks that offer high dividends, which are Realty Income, AT&T, and Toronto-Dominion Bank, making them attractive options for long-term investors [1][2]. Group 1: Realty Income - Realty Income closed at $57.53, with a year-to-date increase of nearly 8% and a high yield of 5.6% [4][6]. - The REIT has declared dividends for 660 consecutive months and recently increased its monthly dividend for the 131st time [5]. - Realty Income expects occupancy levels above 98% and same-store rent growth of around 1%, with funds from operations rising to $1.05 from $0.94 year-over-year [6]. Group 2: AT&T - AT&T trades at approximately $30 per share and has seen a price increase of over 50% in the past year, trading at 17 times trailing earnings [7][8]. - The dividend yield is 3.8%, and the company anticipates free cash flow of at least $16 billion, significantly exceeding its annual dividend payout of $8.3 billion [9]. - AT&T is acquiring Lumen's Mass Markets fiber business, which will nearly double its fiber locations to around 60 million by 2030, indicating growth potential [9]. Group 3: Toronto-Dominion Bank - Toronto-Dominion Bank offers a dividend yield of 4.1% and has increased its quarterly dividend by 42% over the past five years, averaging a compounded annual growth rate of 7.2% [10]. - The bank reported a profit of 16.8 billion Canadian dollars on revenue of CA$58.8 billion, resulting in a profit margin of around 29% [11]. - Trading at approximately $74 and 1.5 times its book value, TD is considered a good value for income investors [12].