The 2 Best ETFs for Dividends - Motley Fool

Many investors enjoy the dividend income that stocks produce on a quarterly -- or in some cases, monthly -- basis.

What some investors may not realize is that exchange-traded funds (ETFs), which are baskets of stocks or other types of securities that trade on exchanges like a single stock, can also produce dividend income -- just like a stock.

If you are looking for stable income, even in uncertain markets, here are two great dividend ETFs to consider: the SPDR S&P Dividend ETF (NYSEMKT:SDY) and the Invesco S&P 500 High Dividend Low Volatility ETF (NYSEMKT:SPHD).

Specifically, it tracks the S&P High Yield Dividend Aristocrats Index, which only includes companies that have increased their dividend for at least 20 consecutive years.

As would be expected from such a concentration of stocks that consistently produce good dividends, the ETF currently pays out a quarterly dividend of $0.68, which comes out to about $2.72 annually per share.

That is less than the S&P 500 in both cases, but this is an ETF that prioritizes dividend income over return -- and given its makeup of Dividend Aristocrats, it is poised to deliver on its mission.

The Invesco S&P 500 High Dividend Low Volatility ETF is a good dividend ETF for these times.

As the name suggests, the ETF tracks the S&P 500 High Dividend Low Volatility Index, which is comprised of just 50 stocks that are deemed the least volatile high dividend-yielding stocks in the S&P 500.

It uses price volatility as a screen to avoid dividend traps, which are stocks with dividends that look good but are not sustainable.

The index looks at the top 75 dividend producing stocks in the S&P 500 and then takes the 50 from that number that have the lowest volatility

There are many good dividend ETFs out there -- and some that will produce even more income than these per year -- but these two ETFs in particular are solid choices for stable dividends in volatile times