As mentioned above, I will mostly dump this money in VIG, but perhaps a few individual div stock plays should be considered. VIG is a great strategy and worth reviewing its holdings:
VIG Portfolio - Learn more about the Vanguard Dividend Appreciation ETF investment portfolio including asset allocation, stock style, stock holdings and more.
www.morningstar.com
Vanguard Dividend Appreciation focuses on quality franchises that have reliably increased the amount of cash they give back to shareholders over time. The fund’s new index utilizes a very similar approach that plies a near-identical strategy, while offering greater transparency and taking a more measured approach to rebalancing in order to minimize market impact costs. We maintain our Morningstar Analyst Rating of Gold for the U.S. share classes and Silver for the Canadian exchange-traded fund.
The fund will switch from the Nasdaq US Dividend Achievers Select Index to the S&P Dividend Growers Index in the third quarter of 2021. Both indexes sweep in stocks that have increased their dividend for at least 10 consecutive years and weight them by market cap. S&P replaces the undisclosed proprietary screen from the Nasdaq index with a simple, transparent yield screen. Both aim to remove stocks with high yields whose dividends might not be sustainable. The S&P index also spreads rebalancing trades over three days instead of one to mitigate market impact costs. While both are market-cap-weighted, S&P uses stocks’ float-adjusted market cap instead of total market cap to improve liquidity.
These stringent selection criteria yield a portfolio that balances income, capital appreciation, and risk. The long look-back period ensures constituents are stable companies with a proven track record, taking out even household names such as Intel INTC or Apple AAPL. S&P’s additional yield screen should continue to steer it further away from distressed companies, similar to how Nasdaq’s proprietary screen improved the portfolio’s earnings growth and profitability metrics. Thanks to this quality focus, a greater percentage of the portfolio is invested in stocks with a positive Morningstar Economic Moat Rating than the Russell 1000 Index. This dials down risk and will give the fund an edge in rocky markets.
The portfolio’s equity income orientation results in sector tilts. As of April 2021, it was overweight in industrials and consumer staples stocks and underweight in technology and energy.