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Best Dividend ETFs for 2023

Updated: Jan 2

It's almost 2023 and the stock market has taken major damage during 2022. Exchange Traded Funds (ETFs) provide instant diversification under one umbrella so you don't have to worry about picking the perfect stock in 2023. In this article we take a deep dive into the best dividend ETFs for 2023. We'll take a look at SCHD stock, NOBL stock, and JEPI stock. Let's see why I chose these as the best dividend ETFs for 2023.

Interested in starting you own Dividend Investing journey? Check out my Ultimate Dividend Investing Guide and personal Dividend Growth Portfolio!

Table of Contents

SCHD Stock

NOBL Stock

JEPI Stock

SCHD Stock

Charles Schwab Logo

SCHD or Schwab U.S. Dividend Equity ETF is one of Charles Schwab's dividend focused ETFs. SCHD is classified as a Large Value ETF.

Below are a few links if you want to do more research:

Here are some of SCHD's highlights:

  • A straightforward, low-cost fund offering potential tax-efficiency

  • The Fund can serve as part of the core or complement in a diversified portfolio

  • Tracks an index focused on the quality and sustainability of dividends

  • Invests in stocks selected for fundamental strength relative to their peers, based on financial ratios

Why did I add it to this list?

SCHD Stock Price history is strong

SCHD's 10-year annualized return hovers around 14.12% which is higher than VOO stock's 13.29% over the same period. These are solid returns that include the added benefit of dividend payments, adding passive income for retirement. The ability for SCHD to keep pace with the SP500 is one of the reasons I chose it for this list. SCHD is poised for strong returns in 2023 if the stock market starts to build momentum and recover from 2022 loses.

SCHD's annual return
SCHD Annual Returns

Let's take a look at the SCHD dividend:

SCHD Dividend Yield: 3.73%

That's more than double the VOO dividend that sits at 1.69%! $1,000,000s invested in SCHD would produce $37,300 in passive income annually and still generate solid annual returns.

SCHD Holdings:

SCHD's top ten holdings compliment other ETFs, with strong holdings like Broadcom stock, Verizon stock, Pfizer stock, Merck stock, and Coca-Cola stock.

SCHD's Top 10 Holdings

Bottom Line:

SCHD tracks the Dividend 100 index with a strong dividend yield of 3.73% and primed to capture the returns of the market as it recovers into 2023. It's a great, well-rounded income ETF to hold for years and into retirement. If you haven't added it yet, now is the time!

NOBL Stock

ProShare logo

NOBL S&P 500 Dividend Aristocrats ETF is ProShares offering for SP500 Aristocrats.

Below are a few links if you want to do more research:

Here are some of NOBL's highlights:

  • The only ETF focusing exclusively on the S&P 500 Dividend Aristocrats—high-quality companies that have not just paid dividends but grown them for at least 25 consecutive years, with most doing so for 40 years or more.

  • Often household names, NOBL's holdings generally have had stable earnings, solid fundamentals, and strong histories of profit and growth.

  • NOBL strategy has a demonstrated history of weathering market turbulence over time by capturing most of the gains of rising markets and fewer of the losses in falling markets.

Why did I add it to this list?

Dividend Aristocrat Access

Dividend Aristocrats have a proven history of continuing to grow and pay dividends through decades of market conditions, including major downturns like 2008 and 2020. Investing in NOBL allows you to directly invest in these companies in a diversified manner. Additionally, NOBL has strong performance that nearly matches that of the SP500. NOBL's annualized returns since inception are 12.07% which only slightly lower than VOOs 13.29% return.

NOBL's total return

Let's take a look at the NOBL dividend:

NOBL Dividend Yield: 2%

That's higher than VOO's dividend that sits at 1.69%! $1,000,000 invested in SCHD would produce $20,000 in passive income annually and still generate solid annual returns.

NOBL Holdings:

NOBL's top ten holdings compliment other ETFs while also not overlapping. NOBL includes strong holdings like Cardinal Health stock, Exxon Mobile stock, Genuine Parts Co stock, and more.

NOBL top 10 holdings

Bottom Line:

NOBL is a great choice if you can't narrow down what Dividend Aristocrats you want to invest in or you want to invest in passively and diverisfied. It's a great compliment to a portfolio of individual stock picks.

JEPI Stock

JEPI or JPMorgan Equity Premium Income ETF is one of JP Morgan's income ETFs. JEPI is different than the other two ETF's listed because it focuses on generating passive income as one of it's primary goals. It's a relatively new ETF with a 2020 inception date. Prior to being offered publicly as an ETF, it was a private investment product offered to JP Morgan customers.

Below are a few links if you want to do more research:

Here are some of JEPI's highlights:

  • Generates income through a combination of selling options and investing in U.S. large cap stocks, seeking to deliver a monthly income stream from associated option premiums and stock dividends.

  • Constructs a diversified, low volatility equity portfolio through a proprietary research process designed to identify over- and undervalued stocks with attractive risk/return characteristics.

  • Seeks to deliver a significant portion of the returns associated with the S&P 500 Index with less volatility, in addition to monthly income.

Why did I add it to this list?

Passive Income

JEPI is about generating passive income. It's at a great buying point since the market got hit hard in 2022. If the market recovers you'll be able to capture some of this recovery and still earn an average of 1% monthly in income distributions. Currently, JEPI sits at 14% dividend yield which would net you $140,000 a year if you had $1,000,000 invested!

JEPI yield attractiveness compared to other assets

Additionally, JEPI has returned -3% YTD. Now, that may not seem like something to highlight but JEPI has performed well in a year where the rest of the overall market failed to do so. The SP500 and NASDAQ posted double digit loses. JEPI has returned 14.47% since inception compared to the SP500 return of 15.13%.

JEPI Holdings

JEPI's top 10 holdings include AbbVie stock, Exxon Mobile stock, Hershey Stock, and more. There is some overlap between this ETF and the others I've mentioned. That's not as important since JEPI's primary focus is producing sustainable passive income.

JEPI's top 10 holdings

Bottom Line:

JEPI has proven it's ability to do what it's designed to do: Produce Passive Income even in a down market. JEPI is a great ETF to add to your portfolio, in moderation, if you want to boost passive income. It's also my favorite choice when it comes to income ETF's.

What ETF is your favorite moving into 2023? Comment Below!

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