Exchange-traded funds (ETFs) have changed the face of investing, helping investors to conveniently simplify their lives at low cost. But there are so many ETFs at this point that it can be confusing to find the ones that are best for your portfolio. Here are four of the best dividend ETFs for your portfolio if you lean toward dividend investing.

1. Vanguard Dividend Appreciation ETF

The first ETF up is the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG). It has the lowest yield here at around 1.8%. That's pretty miserly, but it is still notably higher than the 1.3% dividend yield of the S&P 500 index. The interesting overlay here is that, like the S&P 500 index, the Vanguard Dividend Appreciation ETF owns a fairly large number of stocks, with around 300 holdings.

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VIG data by YCharts.

The ETF's construction is fairly simple. The first step is to create a list of all U.S. companies that have increased their dividends annually for at least a decade. Then the highest-yielding 25% of the companies are eliminated (high yield is clearly not the focus here). The companies that are left are put into the Vanguard Dividend Appreciation ETF with a market-cap weighting.

The ETF hasn't kept pace with the S&P 500 index over time, but if you like the idea of a broadly diversified portfolio filled with stocks that have a history of regularly hiking their dividends, this could be the right ETF for you. Notably, the dividend has doubled over the past decade, which suggests that a lower starting yield can still have a big income effect if you hold this ETF for the long term.

Image source: Getty Images.

2. Vanguard High Dividend Yield ETF

Next up is the Vanguard High Dividend Yield ETF (NYSEMKT: VYM). This exchange-traded fund is pretty simple, too. It takes all of the dividend-paying stocks on U.S. exchanges and then buys the 50% of the list with the highest yields. The portfolio is weighted by market cap. This ETF has over 500 holdings, so its portfolio is even more diversified than the Vanguard Dividend Appreciation ETF. The dividend yield is around 2.9%.

VOO Dividend Yield data by YCharts.

Given the focus on yield here, the Vanguard High Dividend ETF has lagged the S&P 500 index over time by an even greater amount than the Vanguard Dividend Appreciation ETF. But if your goal is to maximize the income your portfolio generates, it could be a great foundational investment. Essentially, these two Vanguard ETFs offer wide diversification and dividends in ways that will meet the investment needs of dividend growth investors and, in this situation, high yield investors.

3. SPDR Portfolio S&P 500 High Dividend ETF

The SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD), meanwhile, allows you to stick with S&P 500 index stocks, but do so with a high-yield focus. It simply buys the 80 highest-yielding S&P 500 stocks, weighting them equally. Equal weighting allows each stock to affect performance to the same degree and helps to reduce the risk that any one stock will overly hamper performance. The dividend yield is an attractive 4.5%, the highest on this list.

SPYD data by YCharts.

Don't buy this ETF looking for material dividend growth over time. The dividend is going to make up a material portion of an investor's total return, but it hasn't risen much over time. However, if you want to maximize income with a hand-selected portfolio of large market capitalization and economically important businesses, the SPDR Portfolio S&P 500 High Dividend ETF should be a top contender.

4. Schwab US Dividend Equity ETF

The Schwab US Dividend Equity ETF (NYSEMKT: SCHD) is by far the most complicated ETF on this list. But it might also be the most attractive, as it manages to mix dividend growth with an attractively high yield. The process starts with the list of companies that have increased their dividends annually for 10 consecutive years. A composite score is created for each of the companies that includes cash flow to total debt, return on equity, dividend yield, and a company's five-year dividend growth rate. The 100 highest-rated companies get included in the ETF and are market-cap weighted.

SCHD data by YCharts.

The end result has been a strongly performing share price, a growing dividend payment, and, today, a roughly 4% yield. The Schwab US Dividend Equity ETF isn't the most diversified, and it isn't the highest-yielding. But it provides a very attractive mix of the two. And, interestingly, it has managed to grow its dividend at a faster clip than the Vanguard Dividend Appreciation ETF.

For many dividend investors, the Schwab US Dividend Equity ETF's approach of using a fairly complex composite score to select stocks will be the most attractive choice. That said, investors need to recognize that this ETF isn't a simple one to understand. If you don't buy into the screening approach, you probably shouldn't buy the ETF.

Dividend options for every kind of dividend investor

Everyone has a slightly different approach to investing. This quartet of dividend-focused ETFs offers up four different dividend investing styles -- from dividend growth to high yield, and a notable choice that successfully manages to bring different investment tactics into one complex and high-yielding ETF. If you are looking for the best dividend ETF for your portfolio, one of these four ETFs will likely be exactly what you are trying to find.

Should you invest $1,000 in Schwab U.S. Dividend Equity ETF right now?

Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Dividend Appreciation ETF and Vanguard Whitehall Funds-Vanguard High Dividend Yield ETF. The Motley Fool has a disclosure policy.

Dividend investors are often drawn to high yields like moths to a flame. When it comes to yields today, there are few that are loftier than AGNC Investment's (NASDAQ: AGNC) 15%-plus dividend yield. Yet if history is any guide, most investors would be better off buying the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) instead, even though it only has a relatively modest 1.8% yield. Here's why.

What do AGNC Investment and Vanguard Dividend Appreciation ETF do?

AGNC Investment is a mortgage real estate investment trust (mREIT). That's a fairly complex niche within the broader REIT sector. AGNC Investment buys mortgages that have been rolled up into bond-like investments, often making use of leverage to do so. Mortgage securities prices can be impacted by interest rates, housing market dynamics, and mortgage repayment trends, among other things. And they trade all day, so stocks like AGNC Investment can be fairly volatile.

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The Vanguard Dividend Appreciation ETF is a diversified exchange-traded fund (ETF). It tracks the S&P U.S. Dividend Growers index. That index starts by taking all of the U.S. companies that have increased their dividends for at least 10 consecutive years and then removes the highest yielding 25% of the list. The rest get into the index (and the ETF) based on a market cap weighting. Note that it is specifically avoiding the highest-yielding stocks.

Income versus total return and back to income again

Here's the interesting thing: AGNC Investment is very clear that income is not its primary goal. Management says its goal is "Favorable long-term stockholder returns with a substantial yield component." That means that delivering a strong total return, which assumes dividend reinvestment, is the main goal, and AGNC Investment has done reasonably well at hitting that target.

AGNC Total Return Level data by YCharts.

Looking at the entire span that both AGNC Investment and Vanguard Dividend Appreciation ETF have existed, AGNC Investment has provided a slightly better total return. But take a look at the dividend and price history of each of these investments. After early spikes in the dividend and price of AGNC, it has been all downhill. By contrast, the Vanguard Dividend Appreciation ETF's dividend payouts and share price have both generally risen over time.

AGNC data by YCharts.

A strong total return is great, but that metric is based on the assumption that you're reinvesting your dividends. Income investors are usually looking to live off of the dividends their investments generate, which means spending them. As the chart above makes very clear, AGNC Investment's dividend payouts haven't been sustainable, while the smaller payouts from Vanguard Dividend Appreciation ETF were sustainable and generally grew over time.

In fact, AGNC Investment has over time reduced its payouts by more than 60% while the total payouts from the components of the Vanguard Dividend Appreciation ETF have increased by more than 200%. For someone whose plans over that period involved using the dividends their portfolio generated to help cover their living expenses, it's pretty clear which investment would have been the better choice.

AGNC isn't a bad investment

AGNC Investment isn't a bad investment -- it's just one that requires a more nuanced view. Yes, its dividend yield is huge, but that doesn't necessarily make it a good income stock. The real gains from owning it come from reinvesting the dividends and focusing on total return, which is not what most dividend investors are likely to be doing. If you are trying to live off of the income your portfolio generates, the Vanguard Dividend Appreciation ETF, despite its much lower yield, will probably be a better choice for your portfolio.

Should you invest $1,000 in AGNC Investment Corp. right now?

Before you buy stock in AGNC Investment Corp., consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AGNC Investment Corp. wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Dividend Appreciation ETF. The Motley Fool has a disclosure policy.

Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) is one of the most successful companies in modern history. Its CEO, Warren Buffett, is a Wall Street legend who has been given the nickname "the Oracle of Omaha." If you are an investor, it's highly likely that you know all about Buffett and the company he runs. But do you know about Markel Group (NYSE: MKL)?

What does Berkshire Hathaway do?

Because of its large insurance operations, Berkshire Hathaway usually gets placed in the finance sector. That's not a bad classification for the company, but it doesn't do justice to the business at all. That's because Berkshire Hathaway is actually a widely diversified conglomerate. The collection of businesses under the Berkshire Hathaway umbrella ranges from auto sales to retail to specialty parts manufacturing. And it has a whole lot in between -- its list of subsidiaries includes over 180 companies.

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Even the insurance operations are used in a slightly different manner than they are at most other insurers. The float, which arises because insurance premiums get paid up front while claims get paid in the future, is used to buy stocks like Coca-Cola, American Express, and Chevron. The diversity in the list of stock investments is just as wide as the diversity in Berkshire Hathaway's owned businesses.

Investors buying Berkshire Hathaway are really investing alongside Warren Buffett. But at the end of 2025, Buffett is retiring from the $1 trillion market cap company he basically created via his unique investment approach. His hand-picked successor, Greg Abel, will likely continue to use a similar approach to that of his mentor Buffett, buying well-run companies while they are attractively priced and then holding on for the long term to benefit from the business' growth over time. But there's no question that Berkshire Hathaway won't be exactly the same in the future as it has been in the past.

What does Markel Group do?

Markel Group, with a market cap of around $25 billion, is a much smaller business than Berkshire Hathaway. But it doesn't pull any punches when it describes its business, making frequent references to Berkshire Hathaway. It also uses the same exact model, of an insurance company that directly owns companies and invests in publicly traded stocks (including Home Depot, Visa, and Deere).

Interestingly, the stock performance of Markel Group hasn't been as strong as that of Berkshire Hathaway or the S&P 500 index (SNPINDEX: ^GSPC) since the 2020 bear market. But Markel's management has been working to shake things up so it can get back to its historical performance, which was actually better than that of Berkshire Hathaway for many years.

This is where the really interesting comparison comes up. Berkshire Hathaway is at the start of a management shake-up. Markel Group is nearer the end of such a shake-up. Berkshire Hathaway's new leader is taking over a company so large that it requires very large changes to affect performance. Markel Group is still small enough that improving the business won't require massive changes. In some ways, and from a big-picture perspective, it sounds like Markel Group is in a better position as a business right now.

Trade down, but perhaps only in size

The world will never see another Warren Buffett because he is a unique individual. But his broad investment approach can be roughly mimicked. Mimicking Buffett is basically what Wall Street wants Greg Abel's job to be when he takes over as CEO of Berkshire Hathaway at the end of 2025. Only he's going to have to do it within the confines of a gigantic company, which means it will be a massive task.

Markel Group has been mimicking Buffett for years. While the company seemingly lost its way to some extent over the last five years, it is working to get back on track. Given the relatively small size of the business, that shouldn't be nearly as large a job as what Greg Abel is dealing with. If you like Berkshire Hathaway, now could be a good time to start looking at Markel Group, where imitation has long been a high form of flattery to Warren Buffett.

Should you invest $1,000 in Markel Group right now?

Before you buy stock in Markel Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Markel Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Chevron, Deere & Company, Home Depot, Markel Group, and Visa. The Motley Fool has a disclosure policy.

AGNC Investment (NASDAQ: AGNC) has a gigantic 15%+ dividend yield. That lofty yield sounds very enticing, but sometimes things that sound too good to be true are, in fact, too good to be true. Here's why investors need to take a very nuanced view of AGNC Investment and how the company may actually be helping you decide when to buy the stock.

What does AGNC Investment do?

Property-owning real estate investment trusts (REITs) buy physical properties and lease them out to tenants. That's what you would do if you owned a rental property, so it's probably fairly easy to wrap your head around the business model. Mortgage REITs like AGNC Investment buy mortgages that have been pooled together into bond-like securities. That's a lot more complex and you probably couldn't mimic that in your own investment life.

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Everything from interest rates to mortgage repayment rates can impact the value of mortgage securities. So even tracking what is going on within AGNC Investment's portfolio, or within any mortgage REIT, would be hard for most investors. Adding to the complexity is that mortgage securities trade all day long, so the portfolio's characteristics can change fairly quickly.

This is not an investment for conservative income investors. That fact is highlighted by the steady downtrend in the dividend over the last decade or so, as the chart below highlights. Not surprisingly, the price of the stock has trailed the falling dividend.

AGNC data by YCharts

What is AGNC Investment worth?

That said, AGNC Investment's value is basically the value of its portfolio of mortgage securities. In that way it is kind of similar to a mutual fund. And, like a mutual fund, AGNC Investment reports the value of its portfolio on a per-share basis. It calls this number tangible net book value per share. It only reports that number quarterly, but it is an important figure to monitor.

At the end of the first quarter of 2025 AGNC Investment's tangible net book value per share was $8.25. At the end of the first quarter of 2022 it was $13.12. Tangible net book value per share can rise and fall fairly dramatically at times, depending on the market environment. Over the past year, for example, this metric has risen and fallen by 5% between quarters multiple times. It is, at best, a rough gauge for investors to monitor between quarters.

But the really interesting thing here is that AGNC Investment's stock price often trades above tangible net book value per share. Sometimes dramatically above the number -- the 52-week high is $10.85 even though the reported tangible net book value per share never rose above $8.84 in any of the last four quarters.

This is great news for shareholders, since AGNC Investment frequently sells new shares to the public to raise additional capital. Every penny above tangible net book value that a new buyer pays is tantamount to giving current shareholders free money. Management even explains this fact when it discusses stock sales, saying things like the company "opportunistically" raised money "at a considerable premium to tangible net book value" and that this brings "meaningful book value accretion to our common stockholders."

AGNC data by YCharts

The takeaway here is pretty clear. Nobody should pay more than tangible net book value per share for AGNC Investment unless they believe that number is going to be headed sharply higher. But sometimes AGNC Investment's share price dips below that figure, with the 52-week low coming in at $7.85. The company would likely not be raising capital at that price, given that it would destroy value for current shareholders. However, if you buy the stock on the open market below book value you are increasing the chances that you are getting a good deal on the stock.

AGNC data by YCharts

The fly in the ointment is the dividend

The problem with this discussion is that it doesn't address the dividend or the dividend yield. That's because the company's focus isn't income, it is total return. The dividend is a part of total return, but total return assumes the dividend is reinvested. But a key part of total return is also the price you pay for the investment.

If you bought at the 52-week high price of $10.85 per share, your total return would be terrible here even with the huge dividend yield. However, if you kept a close eye on tangible book value per share and only bought when the stock price was at or below the last reported figure, your total return would likely still be positive, helped along by that lofty yield.

Should you invest $1,000 in AGNC Investment Corp. right now?

Before you buy stock in AGNC Investment Corp., consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AGNC Investment Corp. wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Federal Realty (NYSE: FRT) is not the largest real estate investment trust (REIT) you can buy. It isn't even the largest REIT in its strip mall niche. It actually has a fairly small collection of properties in its portfolio. And yet it stands head and shoulders above every other REIT when it comes to its dividend. Here's why now is a good time to consider adding Federal Realty and its industry-leading business to your portfolio.

What does Federal Realty do?

Federal Realty owns strip malls and mixed-use properties, which generally include apartments and offices in the mix with retail. Some of the REIT's individual properties are quite large developments with multiyear projects on them. Others are simple strip malls where locals go to meet their everyday needs, like buying groceries or getting a haircut.

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From this perspective, Federal Realty isn't particularly differentiated from its competitors. That changes when you see that it only owns around 100 properties, which is generally a much smaller portfolio than its closest peers. However, those properties are particularly well located, with Federal Realty's assets having a higher average income around them and higher average population density. In other words, its portfolio is focused in wealthy areas with lots of residents nearby, which is exactly where retailers want to be located.

The strength of Federal Realty's portfolio today is highlighted by its occupancy rates. After dipping during the coronavirus pandemic, they are now back above that level and closing in on 20-year highs. Occupancy ended the first quarter of 2025 at 93.6% but is expected to close in on 95% as the year progresses. Even during the pandemic, when non-essential businesses were closed by the government in an attempt to slow the spread of COVID-19, Federal Realty's occupancy didn't fall below 89%.

FRT Dividend data by YCharts

The real story, however, is Federal Realty's dividend, which has been increased annually for 57 consecutive years. That makes the REIT a Dividend King, which alone is an impressive feat. But there's two more nuances here. First, Federal Realty has the longest dividend streak of any REIT. Second, it is the only REIT that is a Dividend King. Having a small, well-positioned portfolio has clearly paid off.

Federal Realty's strength is in development and redevelopment

Federal Realty didn't just buy 100 or so properties 57 years ago and sit on them for half a century. It is actually a quite active buyer and seller of assets. The key to its long-term success is what it does with the assets it buys.

Usually Federal Realty buys well-located properties that need a little love and attention. That could be as simple as a coat of paint and more focus on tenant quality. A refresh of a property's exterior to make it look up to date goes a long way in attracting customers and tenants. But often the capital investments being made are far more extensive.

Federal Realty will usually add to the properties it buys in some way. That can include adding apartments and offices above street-level retail space. It can involve tearing down an entire property and rebuilding it from scratch. Or it can be as simple as getting the permitting to make changes, which alone adds value to a property. When Federal Realty believes that it can sell a property for an attractive price, it will do so and then go on the hunt for another property that it can work on to improve its value over time.

In other words, Federal Realty's portfolio is in a near-constant state of flux. And the inherent push is for the improvement in the quality of its portfolio. Management knows from experience that well maintained and located properties attract tenants, customers, and buyers, and that is the REIT's guiding star.

A great REIT with an attractive yield

Given the quality of Federal Realty's business model, highlighted by its Dividend King status, the shares don't go on sale very often. Today the dividend yield is 4.6%, which is notably higher than the S&P 500 index's (SNPINDEX: ^GSPC) 1.3% and the average REIT's 4.1%. Federal Realty's yield is also near the high side of the range over the past decade. If you are looking for a reliable dividend backed by a high-performing business, Federal Realty should probably be on your short list today.

Should you invest $1,000 in Federal Realty Investment Trust right now?

Before you buy stock in Federal Realty Investment Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Federal Realty Investment Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Reuben Gregg Brewer has positions in Federal Realty Investment Trust. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The world is in the middle of an energy transition. It isn't the first time it has gone through a transition, so there's a rough roadmap when it comes to understanding what comes next. The big picture is that energy transitions take decades to play out. That's why dividend investors should be looking closely at this clean energy-focused investment and its major yield.

What is going on with power?

The modern world doesn't exist without reliable power. That's the core factor to consider here as you examine the energy landscape that exists today and what that landscape may look like tomorrow. Since power isn't optional, the big-picture shift away from dirtier carbon fuels toward cleaner ones that is taking place today simply can't happen overnight. It has to be a slow and steady transition.

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In fact, even some of the oldest energy sources haven't been eliminated, even though they have been usurped by newer energy sources. For example, burning wood is still a frequently used power option. While coal use has been falling in the United States, usually being replaced by cleaner-burning natural gas, coal is still a huge force in the world.

That brings the story to solar, wind, and energy storage. These sources of power are growing rapidly and will likely continue to do so for many years. In the United States alone, wind power is projected to increase 5x over by 2050. Solar is expected to increase by 7x. And battery storage, which is very small today, is projected to grow so much that the numbers aren't meaningful.

The big takeaway is that there's likely to be huge growth ahead for clean energy investments. One of the best ways to take advantage of that growth is Brookfield Renewable (NYSE: BEP)(NYSE: BEPC) and its lofty yield of up to 6.2%.

What does Brookfield Renewable do?

Brookfield Renewable is controlled by Brookfield Asset Management (NYSE: BAM). Brookfield Asset Management has a 100-year-plus history of successfully buying, operating, and selling infrastructure assets on a global scale. This is actually an important fact to keep in mind because Brookfield Renewable is not operated like a utility. It's operated more like a private equity shop, buying, operating, and selling assets over time.

Brookfield Renewable's portfolio spans the entire clean energy spectrum. It owns hydroelectric, solar, wind, battery, and even nuclear power businesses. Those businesses are spread across North America, South America, Europe, and Asia. Given the multi-decade growth opportunity ahead, Brookfield Renewable is likely to see material growth in its business, and it can play wherever clean energy growth is offering the most attractive investment opportunities.

There are two ways to buy Brookfield Renewable. The most attractive, yield-wise, is a partnership share class, which is the one with the 6.2% yield. But for investors who prefer to avoid partnerships, there is also a corporate share class that has a dividend yield of around 5%. The only difference between the two share classes is demand, with many large institutional investors barred from owning partnerships. Small investors will probably prefer the higher-yielding partnership, which is structured so that it doesn't run afoul of the rules for tax-advantaged retirement accounts.

Brookfield Renewable is unloved for the wrong reasons

Brookfield Renewable has been a poor performer on Wall Street as excitement over clean energy has waned. With a pullback on government support in the U.S. market, it would seem like now is a bad time to invest in clean energy. But Brookfield Renewable doesn't expect the U.S. government's pullback to affect it much, if at all. It generally works with companies under long-term contracts, and companies around the world remain committed to shifting toward clean energy.

Moreover, the backing of Brookfield Asset Management means there are still some very deep pockets backing Brookfield Renewable as it looks to grow. Since Brookfield Asset Management's goal is to roughly double its investment in clean energy over the next five years, it seems highly likely that Brookfield Renewable will grow right along with its parent. If you are looking for a high-yielding investment today, clean energy-focused Brookfield Renewable should be on your short list.

Should you invest $1,000 in Brookfield Renewable Partners right now?

Before you buy stock in Brookfield Renewable Partners, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Brookfield Renewable Partners wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Reuben Gregg Brewer has positions in Brookfield Renewable Partners. The Motley Fool recommends Brookfield Asset Management, Brookfield Renewable, and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

Realty Income (NYSE: O) is a foundational stock that can be the backbone of a diversified dividend portfolio. Most income-focused investors should at least consider adding it to their holdings. Here's a look at five key reasons right now is the time to buy this real estate investment trust (REIT).

1. Realty Income has a lofty yield

The S&P 500 index (SNPINDEX: ^GSPC) is yielding about 1.3% today. The average REIT has a yield of 4.1%. Realty Income's dividend yield is roughly 5.7%. Very clearly, it is providing investors with more income than many other options.

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O Dividend Yield data by YCharts.

That said, its yield is also toward the high end of its range during the past decade. It not only looks attractive relative to other options, but the REIT's yield also looks attractive relative to its own history.

2. Realty Income keeps paying more and more

Just having a high yield isn't enough to make a dividend stock a buy. Sometimes a high yield is a sign that the dividend isn't sustainable. But when it comes to providing investors with a sustainable and growing dividend, Realty Income looks like a winner. It has increased its payout annually for three decades and counting. Within that streak is a run of 110 quarterly increases.

This is a business that is designed to reward investors with reliable dividend growth. To be fair, the average annualized increase of the past 30 years was a modest 4% or so. That, however, is just slightly faster than the historical rate of inflation, which means the buying power of its payout is increasing over time.

Image source: Getty Images.

3. It's an industry giant

The company's property focus is on single-tenant net lease assets. A net lease requires the tenant to pay for most property-level operating costs. While any single property is high risk, since there's only one tenant, Realty Income owns 15,600 properties. The risk here is low because most tenants keep paying rent.

Realty Income isn't the just the biggest in this niche, it is also highly diversified. Roughly 75% of its rents come from retail properties, with the remainder in industrial assets and a broad "other" category. (More on that below.)

Unlike many of its peers, however, Realty Income isn't confined to the U.S. It has expanded into Europe, where the net lease model is still underutilized.

Its giant portfolio and broad reach work together to support slow and steady dividend growth, because the REIT can take on deals that its peers couldn't manage. That includes large portfolio transactions and acting as an industry consolidator.

4. It has advantaged access to capital

Being able to absorb large deals is more than just a size issue. It also requires access to capital. Luckily, being a large company makes it easier to sell stock and debt. So Realty Income has an advantage on that front, too.

But it doesn't take that for granted; it has worked to ensure it has an investment-grade balance sheet. That way, when it does go to the markets looking for cash, buyers provide it with attractive terms. An attractive cost of capital lets Realty Income bid aggressively for new properties while still being able to make a healthy profit.

5. It's expanding its options

The "other" category noted above is important. It includes assets like casinos and data centers, where the REIT is starting to explore new investments. Management is also starting to include loans in its mix and is beginning to provide net-lease asset management services to institutional investors. These are all additional irons in the fire to support long-term growth.

But the really exciting aspect here is that Realty Income is being innovative and experimenting with new investments. It is using what it does well -- net leases -- and expanding in new ways.

To some extent, its size requires this approach, given that it takes more to move the needle on the top and bottom line as a company grow larger. But still, the fact that Realty Income is steadily working to maintain its dominance is a sign of management strength. And it helps set up the company and its investors for future dividend increases.

It all comes back to Realty Income's dividend yield

This list started with dividend yield, and it will end with dividend yield because that's what income investors are looking for. But as noted, having a high yield, like Realty Income does, isn't enough to make a stock a buy. Reasons Nos. 2 through 5 help cement the deal, with this entrenched industry giant offering a value proposition that few can match. Right now is a good time to buy if you are looking to add an attractive dividend stock to your portfolio.

Should you invest $1,000 in Realty Income right now?

Before you buy stock in Realty Income, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $828,224!*

Now, it’s worth noting Stock Advisor’s total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of June 2, 2025

Reuben Gregg Brewer has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.

Share prices of NuScale Power (NYSE: SMR) recently hit all-time highs around $36 per share. Up more than 250% over the past year, is the stock a buy at what are historically lofty price levels?

Here are a few things to consider before you buy shares in this nuclear power start-up.

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What does NuScale Power do?

NuScale Power has big plans for its business, but right now it doesn't really have that much of a business. That's because it only brought in revenue of $13 million in the first quarter of 2025. That came with roughly $6 million in costs, leading to a gross profit of about $7 million.

With research and development costs of $9 million and selling, general, and administrative costs of $23 million, the company is nowhere near turning a profit.

Image source: Getty Images.

That's not surprising, however, given what it is trying to do. It has developed plans for a small-scale modular nuclear reactor.

Basically, it has taken current nuclear reactor technology and scaled it down. The result is a reactor that can be partially pre-built in a factory and transported to a site, which should reduce costs and complexity, and save huge amounts of time relative to the building of a large nuclear reactor on site. Its modular reactors also incorporate the latest technology, which should increase the safety of the reactors as well.

NuScale's small modular reactors could represent a sea change in the way the world thinks about and uses nuclear power. Indeed, the modular units can be transported to where they are needed, used in closer proximity to large populations, and linked together to create a larger power source. It is an exciting concept. But right now, that's all it is: a concept.

NuScale has the wind at its back, if things go as planned

The current administration in Washington appears to be very supportive of nuclear power as a source of carbon-free energy. Some executive orders from the Trump administration in May led to a swift increase in the stock price. It is now back near 52-week highs. But that's not the only reason to be optimistic here, given that it has a tentative deal to sell six of its reactors to RoPower, a Romanian power company.

It is currently working on feasibility studies to help RoPower make a final investment decision later this year. If this capital investment project gets the green light, NuScale Power will have its first official customer. That should help it land more. The company is, in fact, already preparing for additional customers, with orders for enough long-lead-time parts to build 12 of its reactors.

Data by YCharts.

The only problem is that the RoPower project won't be complete until something like 2030. So there's still a lot of time to go before the company's small modular nuclear reactors are actually market tested.

And that means that it will likely remain a story stock for at least a few more years. Story stocks tend to be very volatile, especially when they are small start-ups.

As the chart above highlights, NuScale stock fell over 50% from an early-year peak in 2025 before rebounding on the news out of Washington. And before that, it had several large drawdowns as well. This is not a stock for conservative investors. And if you buy it now, you had better be ready for a bumpy ride and have a strong belief in the glass-half-full view of the future.

Well below $31 is probably the right call

NuScale Power is getting close to an important inflection point for its business as its first potential customer nears the yes/no decision on a major capital investment project. The stock will likely rally if the answer is yes. But that doesn't mean the shares won't see yet another steep drawdown, which are kind of common events for small start-ups.

If you have a positive long-term view of the business, buying around the current price might make sense. But if you are patient, it seems likely you'll have an opportunity to buy at a potentially much lower price as NuScale's story plays out.

Should you invest $1,000 in NuScale Power right now?

Before you buy stock in NuScale Power, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and NuScale Power wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $828,224!*

Now, it’s worth noting Stock Advisor’s total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of June 2, 2025

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.

O'Reilly Automotive (NASDAQ: ORLY) had a decent fiscal 2025 first quarter when you look at its overall results. But when you actually dig into the earnings release a little bit, you see that there's more here than meets the eye.

Here's how this auto parts retailer really managed to increase its earnings year over year in the first quarter of 2025.

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What does O'Reilly Automotive do?

O'Reilly Automotive is, at its core, a retailer. What it sells are auto parts. Not a complex business by any stretch of the imagination, though the company does serve both the do-it-yourself and the professional markets (they each have very different sales dynamics). The company operates around 6,400 stores across North America, which is a pretty big footprint.

Image source: Getty Images.

As a retailer, there are two main ways for the business to grow. The first is via new store openings. Management is planning on opening roughly 200 new locations in 2025. The other way is to do more business in the stores it already owns, which is tracked by same-store sales. In the first quarter, O'Reilly's same-store sales increased 3.6%. That's not bad at all and, when combined with new store openings, should help to drive reasonable top-line growth.

When you look at the income statement from the first quarter of 2025, sales (the top line) increased by 4%. Slow and steady is hard to complain about, given the uncertainty that had consumers worried about the possibility of a recession during most of the first quarter. Earnings, however, were up only roughly 2%, which isn't quite as good as the sales growth.

Digging into O'Reilly's income statement

The difference between sales and earnings is the first sign that investors should take a closer look at O'Reilly's income statement. This is where the story gets a lot more complicated for what is a fairly simple business.

O'Reilly's sales rose 4%, as noted. And while its cost of sales (basically the cost of the auto parts it sold) rose, the gross profit figure advanced year over year. So far, so good. The problem starts when you take one more step down the income statement to look at selling, general, and administrative costs. That's basically what it costs the company to run its stores.

This figure went up year over year, too, and more than offset the gross profit increase. Add in a few more puts and takes along the way, and O'Reilly's net income fell year over year from $547 million in the first quarter of 2024 to $538 million in the first quarter of 2025.

That's not great news. But the interesting thing is that the company's earnings-per-share figure for the quarter rose from $9.20 in the first quarter of 2024 to $9.35 in the first quarter of 2025. Net income was lower, but earnings per share was higher? That doesn't make logical sense until you examine the share count, which fell 3% year over year. So, net income was spread across fewer shares, resulting in the higher earnings figure.

O'Reilly Automotive is doing what needs to be done

To be fair, O'Reilly isn't playing games or doing anything wrong. It is facing a difficult period and doing what it can to continue growing its earnings. In this case, that required buying back stock. A lot of companies do this.

The problem is that the first quarter's results were, perhaps, not quite as strong as a cursory look at the earnings release might indicate. In fact, the earnings advance year over year was around 1.6%, so the stock buyback only offset part of the profit impact of the company's rising costs. If you own O'Reilly or are thinking about buying it, you might want to pay a little more attention to the company's rising operating costs. They could be a bigger headwind than you think.

Should you invest $1,000 in O'Reilly Automotive right now?

Before you buy stock in O'Reilly Automotive, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and O'Reilly Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,385!*

Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Dividend investors are always on the hunt for the best combination of yield and company quality. Right now, you can get above-average yields from industry-leading companies in the real estate investment trust (REIT) sector. Giant high-yield landlords Realty Income (NYSE: O) and Simon Property Group (NYSE: SPG) are two companies that you might want to buy today.

Why buy real estate investment trusts?

Real estate investment trusts were specifically designed to generate tax-advantaged income for investors. Property owning REITs like Realty Income and Simon are fairly simple businesses to understand, since they do exactly what you would do if you owned a rental property. The difference is that they do it at a much larger scale, which is the whole point. REITs allow small investors access to institutional-level properties.

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Image source: Getty Images.

The tax-advantaged part of the equation comes about because REITs avoid paying corporate-level taxes if they distribute at least 90% of taxable earnings out as dividends. Uncle Sam isn't just giving away free money, though; shareholders have to treat the dividend income as they would regular earned income. But there's a workaround. If you buy a REIT in a Roth IRA, which is funded with after-tax money, you won't have to pay taxes on the REIT dividends you collect.

For investors who are retired, buying REITs in a Roth is a great way to boost income while still minimizing the taxes you have to pay. There are a lot of REIT options, but most investors will be better off sticking with the biggest and best companies, like Realty Income and Simon Property Group.

Realty Income is the net lease giant

The average REIT is currently yielding around 4.1%, which is more than twice the yield on offer from the S&P 500 index (SNPINDEX: ^GSPC). Realty Income's dividend yield is even higher at roughly 5.7%. This isn't some fly-by-night operation, either. Realty Income is the largest net lease REIT, with a portfolio of over 15,600 properties.

Although it is heavily focused on single-tenant retail properties, it also invests in industrial assets and is increasingly diversifying into other areas. For example, it has invested in casinos in recent years and has a partnership working to build data centers. Loans are a new platform, and Realty Income is also attempting to set up an asset management business to service institutional investors (which will generate fees to support shareholders' dividends). On top of all of this, the REIT is geographically diversified across the United States and Europe.

Realty Income won't wow you with growth; it is simply too large for that. But if you want to own the biggest and best competitors, this is going to be the high-yield net lease landlord for you.

Simon Property Group is the mall king

Simon Property Group's dividend yield is around 4.9% today, also well above the REIT average and the yield on offer from the S&P 500 index. The company's focus is on owning malls, which are retail properties but have a very different dynamic from the types of properties Realty Income owns. A mall is like an ecosystem, with each tenant impacting the way the ecosystem operates.

As the largest mall REIT, Simon Property Group owns a massive collection of traditional enclosed malls and outlet centers. Its portfolio spans the globe, though its foreign investments are largely outlet centers. Over the years, the REIT has increasingly focused its portfolio on the best malls, known as A malls. These tend to be modern, well-located properties that are capable of charging the highest rents because they draw the largest crowds. Simon is a very important partner to retailers.

SPG Dividend Per Share (Annual) data by YCharts

There is a caveat with Simon. It passes a huge amount of income on to investors, but during some recent economic recessions, it has cut its dividend. After the cut, however, the dividend has quickly started to grow again toward the precut level. In the case of the deep Great Recession, meanwhile, the dividend has now grown well beyond the precut level. Simon is a stock that you'll want to hold for the long term, perhaps even buying more shares when other investors are selling.

Realty Income and Simon are the kinds of giants you own forever

Like any business, Realty Income and Simon Property Group will see their fortunes wax and wane over time. But their size and long histories of success make them strong, high-yield landlords to look at today. While they are attractive REIT investment choices most of the time, their higher-than-average yields could make each a nice addition to your stock portfolio right now.

Should you invest $1,000 in Realty Income right now?

Before you buy stock in Realty Income, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,385!*

Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

Reuben Gregg Brewer has positions in Realty Income and Simon Property Group. The Motley Fool has positions in and recommends Realty Income and Simon Property Group. The Motley Fool has a disclosure policy.

Warren Buffett uses Berkshire Hathaway as his investment vehicle, with the conglomerate buying and selling stocks and entire companies. Investors can get ideas by examining Berkshire's portfolio of investments, both public and private. One big investment area for Buffett is utilities. You can easily invest in well-run utilities, too, and here's a particularly attractive option for doing that right now.

Black Hills is a Dividend King

What sets Black Hills (NYSE: BKH) apart from most of its peers is its impressive dividend history. The electric and natural gas utility has increased its dividend annually for 55 consecutive years. That makes Black Hills a Dividend King, which is a highly elite group of companies. A company doesn't achieve Dividend King status by accident; it requires a strong business model that is executed well in good times and bad. Black Hills is one of the few utilities to achieve this feat.

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Black Hills operates in parts of Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming, providing energy to around 1.35 million customers. Notably, the company's customer growth is running at nearly 3 times the rate of the overall population growth in the United States. More customers mean more revenues and will likely lead to easier conversations with regulators around rate hikes and capital investment plans.

This utility is currently offering a generous 4.4% dividend yield. That is well above the 1.3% yield of the S&P 500 index and the 2.9% or so average for utilities. And Black Hills' yield is toward the high end of its yield range over the past decade. All in all, it looks like a bargain today.

BKH data by YCharts.

Jump on a deal that Buffett won't

Black Hills looks attractively priced and has a strong business, along with solid growth prospects. Currently, management is targeting earnings growth of between 4% and 6% a year, with dividends likely to trail higher at around the same rate. There is a lot to like here, but there's one small problem (pun intended).

Black Hills' market cap is a tiny $4.4 billion or so. The truth is, Warren Buffett could easily snatch it up within Berkshire Hathaway's $1.1 trillion-sized conglomerate. Only, nobody would notice. Black Hills just isn't large enough to move the needle on the top or bottom lines. On top of that, Berkshire Hathaway's utility operations don't significantly overlap with Black Hills' service regions. So, buying it likely wouldn't provide much business benefit, either.

Given the size and business issues, it is highly unlikely that Buffett is looking at this tiny Dividend King utility. But that doesn't mean you shouldn't. Of course, you need to go in with realistic expectations. Black Hills is a rather boring company, and it isn't going to be the type of stock you brag about owning at cocktail parties (like you might if you owned Berkshire Hathaway). Slow and steady earnings and dividend growth are the name of the game.

But that isn't a bad thing. Berkshire Hathaway doesn't pay dividends; instead, it chooses to use the cash flows generated by the companies it owns to reinvest in its business. You can essentially achieve the same result by reinvesting Black Hills' dividends. Or if you prefer, you can use the steady stream of dividend cash to pay for living expenses. Either way, it is worth noting that the regular dividend hikes have outpaced the historical rate of inflation growth, so the buying power of Black Hills' dividend has grown over time.

A solid, though boring, high-yield Dividend King

Just because Buffett buys a stock or invests in a sector doesn't mean you should, too. You need to make sure the investment decisions you make align with your portfolio and investment approach. However, there's no harm in taking some cues from a man whom Wall Street has dubbed the "Oracle of Omaha" because of his long history of investment success.

In this instance, his utility investments could easily lead you to Dividend King Black Hills. Buffett isn't likely to buy it, but this tiny high-yield utility might fit perfectly into your dividend portfolio.

Should you invest $1,000 in Black Hills right now?

Before you buy stock in Black Hills, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Black Hills wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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Reuben Gregg Brewer has positions in Black Hills. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

Netflix (NASDAQ: NFLX) has changed the media landscape, not once but twice. First it altered the way consumers rented DVDs and then it basically helped to create the streaming business. Both times it used a subscription model. And that model is what makes this company so resilient during economic downturns. It could be the perfect recession stock, but does that make it worth buying today?

What does Netflix do?

Netflix basically provides the software platform through which consumers can stream media. It charges monthly fees to consumers for the use of the platform. The subscription revenue it generates is used to pay for the content that Netflix offers on its service. In the early days, the company was busy building its software offering and spent heavily on content to attract consumers. But it has now gained enough scale that it is a sustainably profitable business.

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The subscriptions are annuity-like income streams. The key here is that a monthly subscription to Netflix is fairly low cost relative to what it would cost to go out to see a movie in a theater. And that's true for just for a single person, the benefit gets even greater for couples and greater still for couples with children. And since Netflix can be used on multiple types of devices, the service can, essentially, travel with a customer. There are a lot of positives here and very few negatives.

Which is why recessions aren't that big a deal for Netflix's business. While consumers may pull back on going to the movies, or other out-of-home entertainment, they probably aren't going to cut off Netflix unless they have no other choice.

The company sailed through the brief recession during the coronavirus pandemic period. But the bigger test was the Great Recession, where revenue didn't skip a beat despite the length and depth of the economic downturn. If history is any guide, the next recession shouldn't be too much of a headwind for the company, either.

Is Netflix worth buying now that economic uncertainty is high?

The key words above are "too much of a headwind." That's because Netflix was still in an early stage of growth during the Great Recession. It has reached a far more mature state today, so there's a chance that a recession will have a bigger impact on the top line. Given the nature of its media business, however, it seems highly unlikely that Netflix's sales and earnings will suddenly plunge.

This dynamic was highlighted in the company's first-quarter results. The company's revenue was ahead of its guidance, which is a very good sign. But management refrained from updating its full-year guidance. That suggests that the company is worried that the strong first quarter will be offset by weaker quarters later in the year.

That's hardly the end of the world, however, and is probably a prudent decision given the economic uncertainty. Netflix is still likely to be a strong performer even if there is a recession. The problem isn't the company's business, it is the stock's valuation. The stock's price-to-sales, price-to-earnings, and price-to-book value ratios are all above their five-year averages. This suggests the stock is expensive, noting that the shares are trading near their all-time highs.

To paraphrase famed value investor Benjamin Graham, even a good stock can be a bad investment if you pay too much for it. And it looks like investors are paying a high price for the perceived safety of Netflix's streaming business.

Netflix's business is resilient, but it stock may not be

If you are looking for an investment that will survive a recession in relative stride, Netflix's business seems highly likely to do just that. However, it is unclear what will happen to the stock, which appears to be pricing in a lot of good news. And given that management is taking a cautious stance with its full-year 2025 guidance, it probably makes sense for investors to take a cautious stance with the company's richly valued stock.

Should you invest $1,000 in Netflix right now?

Before you buy stock in Netflix, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Netflix wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

Now, it’s worth noting Stock Advisor’s total average return is 859% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.

When most investors think about buying "the market," they probably have the S&P 500 index (SNPINDEX: ^GSPC) in mind. But that's not the market -- it's just 500 or so hand-selected large and economically representative companies. If you want to own the market, you'll have to consider an exchange-traded fund (ETF) like the Vanguard Total Stock Market ETF (NYSEMKT: VTI) or the SPDR Portfolio S&P 1500 ETF (NYSEMKT: SPTM). They are not interchangeable, and in the end, one may be even better than the S&P 500 index.

The best way to buy "the market"

It would be virtually impossible for most investors to go out and buy 500 stocks, let alone 1,500 or 3,598 (more on this strangely precise number in a second). So the only real option for buying the market is to buy a pooled investment vehicle like a mutual fund or an ETF. Given the many benefits of exchange-traded funds, including ultra-low costs and all-day trading, ETFs are likely to be the go-to option.

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But when you are looking to buy "the market," you have to actually decide what that means. The S&P 500 index is a good starting point, but it is a list of roughly 500 companies that have been selected by a committee to be representative of the U.S. economy. The stocks in this index, which can be bought via the Vanguard S&P 500 ETF (NYSEMKT: VOO), make up around 80% of the market cap of all U.S. stocks. That's a lot of the market, but it isn't all of the market.

The rest of the market is largely made up of small and medium-sized companies. However, there will also be large companies that didn't make it past the committee process for some reason, which often includes financial troubles of some sort. But all of these companies add diversification for investors who truly want to own "the market." This is where the Vanguard Total Stock Market ETF and the SPDR Portfolio S&P 1500 ETF come in.

Extending the theme and just buying it all

The SPDR Portfolio S&P 1500 ETF is basically a cousin to the S&P 500 index. It owns the S&P 500, plus the S&P MidCap 400 Index and the S&P SmallCap 600 Index. Add it all up, and you get roughly 1,500 stocks that account for around 90% of the market cap of all U.S. stocks. All three of these indexes follow the same basic committee approach, though the S&P 500 gets the most scrutiny.

Still, that's not all of the market. The Vanguard Total Stock Market ETF gets you much closer, with 3,598 holdings. That said, there's no screening process here other than the stock being traded on a U.S. exchange. Like the S&P options, the Vanguard Total Stock Market ETF is market cap weighted, so the largest stocks have the most effect on the ETF's performance. However, adding in those extra 2,000 or stocks has made a big difference on the performance front.

SPTM Total Return Price data by YCharts.

As the total return chart above highlights, the Vanguard Total Stock Market ETF has outperformed both the S&P 500 index and the S&P 1500 index over the longer term. In other words, when you buy the market, all of those extra stocks -- around 20% of the overall market cap of the U.S. market -- appear to add value. Notably, cherry-picking stocks with a committee doesn't appear to help all that much.

If you want "the market," think bigger

If you say you own the market and you only own the S&P 500 index, you don't actually own the market. If history is any guide, owning as much of the market as possible appears to have a performance benefit. That's why index investors should probably take a closer look at the Vanguard Total Stock Market ETF. You may decide to stick with the S&P 500 and its committee approach, but you should at least look at your other, and possibly more attractive, options.

Should you invest $1,000 in Vanguard Total Stock Market ETF right now?

Before you buy stock in Vanguard Total Stock Market ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Total Stock Market ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

Now, it’s worth noting Stock Advisor’s total average return is 859% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF and Vanguard Total Stock Market ETF. The Motley Fool has a disclosure policy.

Few investors enjoy market uncertainty, so the current state of affairs on Wall Street is probably a little unsettling for you. Buying dividend stocks can help calm your nerves because you can focus on collecting dividend checks instead of price volatility. Here are three brilliant dividend stocks that will serve you well now and are well worth holding for the long term.

1. The Monthly Dividend Company to the rescue

If you are watching the markets and feeling a little seasick, you might want to look at buying Realty Income (NYSE: O). The company pays monthly dividends, so it provides investors with a steady stream of income. The dividend, notably, has been increased annually for 30 consecutive years and is backed by an investment-grade-rated balance sheet. The real estate investment trust (REIT) is so focused on dividends that it actually trademarked the nickname, "The Monthly Dividend Company."

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Realty Income is the largest net lease REIT. This means that tenants pay for most property-level operating costs. It is a fairly low-risk approach in the sector when spread across a large portfolio.

Realty Income owns over 15,600 assets across the United States and Europe. And while retail properties make up around 75% of rents, these assets tend to be easy to buy, sell, and release if needed. The other 25% of rents, from things like industrial and gaming properties, provide diversification to the mix.

Historically well run and reliable, this REIT's lofty 5.5% yield should be on your radar screen given the uncertainty on Wall Street today.

2. Prologis is exposed, but you should take the long view

Next up is Prologis (NYSE: PLD), which is the largest REIT in the warehouse niche. It has a global footprint, owning assets in most of the world's major transportation hubs. That sounds like it would be a major problem in the middle of tariff issues, which is one of the reasons why the stock is down around 20% from its 52-week highs. This drop, however, has pushed the dividend yield up to an attractive 3.9%. That is near the highest level in a decade.

Prologis has increased its dividend annually for 12 years. And while it could be hurt by the tariff side of the geopolitical turmoil, international trade isn't going to stop. It is far more likely that trade lines shift and that well-located warehouses remain in high demand. In other words, the uncertainty today is an opportunity for long-term investors to buy the industry leader in a still important REIT segment.

3. AvalonBay provides a life necessity

AvalonBay (NYSE: AVB) is the largest apartment REIT by market capitalization. Its dividend yield today is around 3.4%. That's the lowest on this list, but apartment REITs tend to have modest yields. That yield is kind of middle of the road for AvalonBay, which is often afforded a premium over its peers. The dividend hasn't been increased every year but has trended steadily higher for decades.

There are two big reasons to like AvalonBay. First, even in difficult periods people need a place to live. Thus, the REIT provides a necessity. Second, AvalonBay has a long history of deftly managing its portfolio through good and bad markets. That includes shifting between buying, selling, and building assets depending on which will provide the highest returns.

And management has also shifted its geographic positioning along with demand trends, with the current effort being building new apartments in the Sun Belt region. If you favor industry leaders, AvalonBay is the apartment giant you'll want in your portfolio now and, likely, for years to come.

Go with the biggest and best if you are looking for dividend stocks

When times get tough, it is usually a good choice to focus on industry leaders. That said, the REIT sector offers a large number of large, industry-leading companies because of the various unique property niches in the sector. Given the high yields REITs offer, that makes this sector a brilliant area to look at for opportunities. And industry leaders Realty Income, Prologis, and AvalonBay are all great starting points.

Should you invest $1,000 in Realty Income right now?

Before you buy stock in Realty Income, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

Now, it’s worth noting Stock Advisor’s total average return is 859% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Reuben Gregg Brewer has positions in Realty Income. The Motley Fool has positions in and recommends Prologis and Realty Income. The Motley Fool recommends AvalonBay Communities and recommends the following options: long January 2026 $90 calls on Prologis. The Motley Fool has a disclosure policy.

Warren Buffett's best advice for the average investor is to just buy "the market." He has singled out the S&P 500 index as a good choice for this approach, and an S&P 500 ETF wouldn't be a bad choice, but it also isn't "the market." A more comprehensive option would be the SPDR Portfolio S&P 1500 Composite Stock Market ETF (NYSEMKT: SPTM). Here's why.

What does the S&P 500 index do?

The S&P 500 index is fairly well structured. As its name implies, it owns around 500 stocks (although corporate events can change the number over the short term). Those stocks are selected by a committee so that they are broadly representative of the U.S. economy. The largest and most important companies in an industry tend to be the ones that get added to the S&P 500 index. The index constituents are weighted by market capitalization, so the largest companies in the index have the most impact on its performance.

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Image source: Getty Images.

There are negative aspects about the structure of the S&P 500 index, too. For example, market cap weighting often leads to the index being heavily influenced by hot sectors. When sentiment turns negative that can lead to swift drawdowns. That's been on display recently with the market sell-off. However, the index weightings rebalance over time and new sectors rise to the top. All in, the S&P 500 index is a solid suggestion, which is why Warren Buffett guides investors toward this option.

That said, the S&P 500 index leaves out a lot of stocks because of its focus on large companies. Specifically, mid-cap and small-cap stocks aren't represented and there are a lot more of those companies than large caps.

SPTM data by YCharts

Get all the caps with the S&P 1500 Composite

There are a couple of reasons you might want to add mid-cap and small-cap stocks to the mix. For starters, more stocks means more diversification. You'll also get exposure to companies that have potentially larger growth opportunities given their relatively small sizes. If you like the concept of the S&P 500 index, but want to have broader exposure to "the market," you should look at the SPDR Portfolio S&P 1500 Composite Stock Market ETF.

This ETF is actually three indexes in one. The portfolio includes all of the S&P 500 index stocks along with the stocks included in the S&P Midcap 400 index and the S&P Small Cap 600 index. That truly covers the broadest possible spectrum of the market, with a very modest expense ratio of just 0.03%.

SPTM Total Return Price data by YCharts

What's most notable, however, is that the S&P Midcap 400 index and the S&P Small Cap 600 index are constructed in a similar manner to the S&P 500 index. Specifically, a committee oversees the companies that get added to the respective lists. If you like the idea of a little human intervention to weed out obviously troubled businesses, the SPDR Portfolio S&P 1500 Composite Stock Market ETF has you covered.

And since the index is market cap weighted, the stocks in the S&P 500 will still have the biggest impact on overall performance. All in, you increase diversification without losing much on the performance side of the equation.

If you want the biggest slice of "the market"

Owning the SPDR Portfolio S&P 1500 Composite Stock Market ETF has been a far better option than simply buying small-cap or mid-cap indexes. Yes, you could do better with just the S&P 500 index, but you give up very little performance with the larger S&P 1500 Composite and materially increase diversification.

All in, if you want to own "the market" as Warren Buffett has suggested, the SPDR Portfolio S&P 1500 Composite Stock Market ETF is one of the broadest options you have at your disposal. Notably, it comes with a healthy dose of human oversight for those who aren't comfortable leaving investing decisions to computers or blind fate.

Should you invest $1,000 in SPDR Series Trust - SPDR Portfolio S&P 1500 Composite Stock Market ETF right now?

Before you buy stock in SPDR Series Trust - SPDR Portfolio S&P 1500 Composite Stock Market ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SPDR Series Trust - SPDR Portfolio S&P 1500 Composite Stock Market ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Dollar Tree (NASDAQ: DLTR) bought competitor Family Dollar in 2015. Now, it's selling the chain to a pair of private equity firms at a steep loss. Weirdly, the sale could result in competitor Dollar General (NYSE: DG), still a standalone business, being the big winner from the transaction.

Dollar Tree's expensive mistake

One of the ways that a company can destroy shareholder value is by acquiring other businesses that turn out to be worth considerably less than their purchase prices. Some Wall Street insiders cynically call this process "di-worse-ification." Sometimes, this questionable strategy is driven by a CEO who is hell-bent on building an empire, no matter the cost. Other times, companies are simply trying to find new avenues for growth, and their hopeful efforts just don't pan out as well as they expected.

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Image source: Getty Images.

When Dollar Tree bought peer Family Dollar for roughly $9 billion in 2015, management's idea was that it could find a way to synergistically operate two discount chains with different approaches: Dollar Tree, with its core concept of selling everything in the store for $1 or less, and Family Dollar, with its approach of basically being a low-cost local convenience store.

But last month, Dollar Tree agreed to sell the Family Dollar retail concept to Brigade Capital Management and Macellum Capital Management for just a touch over $1 billion. That fire-sale price suggests that Dollar Tree made a material mistake with its purchase.

Notably, over the decade that Dollar Tree owned Family Dollar, the core Dollar Tree concept expanded to include a wider range of prices and an increasing array of products, like frozen foods. Though their business models are not quite the same, Dollar Tree did begin to look more like Family Dollar. Meanwhile, the Family Dollar brand ended up being a distraction that simply wasn't performing as well as management had hoped it would. It was probably the right idea for Dollar Tree to salvage as much money as it could by selling it.

Dollar General could end up with less competition

Family Dollar and Dollar General are fairly similar retail concepts: Both are attempting to fill the local convenience store niche, like an old five-and-dime, particularly in smaller towns that aren't directly served by big-box stores.

That said, the next steps for Family Dollar are probably going to be dramatic. Managers of public companies have to justify every decision to investors, who can be more focused on near-term impacts to the business and its stock price. Once it goes private, it's possible Family Dollar's new owners will be able to make quicker and larger moves to get the business back into fighting shape. That effort will likely include speeding up the pace of store closures.

Dollar General is also closing some locations to fine-tune its footprint. However, it is opening more stores than it is closing. In 2025, it expects to increase its store count by 2%. That's modest, for sure, but it's still growth. The net result of the Family Dollar sale, meanwhile, could be that Dollar General will face less competition in some markets as Family Dollar stores get shuttered. Those store closures could also open up expansion opportunities in markets that Dollar General previously hadn't served.

Dollar General could have a new tailwind

To be fair, Dollar General isn't exactly hitting it out of the park today. Revenue rose 4.5% in 2024, but earnings fell materially thanks to the company's own strategic review. The stock has fallen dramatically, as well. However, the company's repositioning effort could actually have just gotten a little easier to achieve thanks to Dollar Tree's sale of its competitor concept, Family Dollar.

If you have been looking at Dollar General with its historically elevated 2.5% dividend yield and thinking there's a value play here, you may now have even more reason to like the stock than you did before.

Should you invest $1,000 in Dollar General right now?

Before you buy stock in Dollar General, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Dollar General wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

When the market starts to tumble, more aggressive investors often start looking for bargains in the list of previous top performers. For example, American Express has fallen nearly 30% from its early-year highs. But its yield is only around 1.4% even after that stiff drop. At the other extreme, investors sometimes reach for yield with a company like AGNC Investment, which is down nearly 20% from its peak and yields a huge 16%. But AGNC's dividend history includes repeated dividend cuts.

It would be better for income investors to stick with their core approach. Buying popular stocks that have sold off, but not enough to give them an attractive yield (like American Express), or ultra-high-yield stocks with unreliable dividend histories (like AGNC) could be a setup for disappointment. It is far better to stick with reliable high-yield stocks that are likely to keep rewarding investors even in a market downturn or recession -- like this trio, with yields up to 6%.

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Image source: Getty Images.

1. UDR's core business is a basic necessity

UDR (NYSE: UDR) is a real estate investment trust (REIT), just like AGNC Investment. Only AGNC Investment is a mortgage REIT, a fairly complex type of REIT, while UDR is a property-owning REIT that focuses on apartments. UDR's dividend yield is an attractive 4.2% and the dividend has been increased for 16 consecutive years. That's in stark contrast to AGNC's dividend, which has been in a downtrend over that entire span.

What's interesting about UDR's business is that housing is a necessity. Bear markets and recessions don't change the need for having a roof over one's head. On top of that, this apartment landlord has one of the most diversified portfolios in the apartment REIT sector, with operations in coastal markets and in the sunbelt, in urban and suburban locations, and with both A and B quality assets. With a downtrend in construction of new apartments in UDR's markets expected to last until late 2026, this high-yield landlord appears well positioned to weather the current market and economic turbulence.

2. Toronto-Dominion Bank is out of favor, but still financially strong

Next up is Toronto-Dominion Bank (NYSE: TD), which is usually just called TD Bank. The bank was in its own personal bear market before the S&P 500 started to waver, in stark contrast to fellow financial giant American Express, which was trading near its all-time highs. That's worth noting because American Express has fallen nearly 30% from its 2025 highs while TD Bank is only down around 10%. That difference is largely because so much bad news is already priced into TD Bank's stock.

The bad news is that TD Bank's U.S. operations were used to launder money. It had to pay a large fine, is upgrading its internal controls, and is living under an asset cap in the U.S. market. The asset cap basically limits TD Bank's ability to grow its U.S. operations, which were expected to be the bank's growth engine. This is a black eye for TD Bank, but it isn't a knockout punch. In fact, the Canadian bank increased its dividend 3% after it announced the resolution with U.S. regulators. And once the asset cap is lifted, which could take a few years, U.S. growth will likely resume.

Meanwhile, TD Bank's Canadian operations are unaffected and the bank remains one of the largest and best-positioned financial institutions in that country. Given the downturn in the company's shares that has already happened, this bank giant is a low-risk turnaround that most income investors will probably find appealing. Note, too, that TD Bank didn't cut its dividend during the Great Recession, as did many of its U.S. bank peers, suggesting it's a resilient business even during the worst of times. Its yield is 5.1%.

3. W.P. Carey is a nuanced selection

Net lease REIT W.P. Carey (NYSE: WPC) cut its dividend in 2024 after deciding to exit the office property sector. Investors didn't like that move even though it has made this globally diversified REIT a better company. Notably, the dividend went right back to its quarterly increase cadence following the cut. That's a sign that W.P. Carey is operating from a position of strength and that the office exit was a business reset, not a sign that the REIT was struggling. And the cut clearly wasn't the start of a trend, like the long downturn in AGNC's dividend. W.P. Carey's dividend yield is a lofty 6% or so.

What's interesting here is that Wall Street has been in a show-me state of mind with W.P. Carey since the cut. And now, as 2025 has moved along, the mood among investors has become broadly negative. And yet the cash from the office exit allowed W.P. Carey to invest in new assets, a large portion of which were bought in late 2024. The financial benefits from those assets are going to start showing up this year. Since most investors aren't likely to be looking for W.P. Carey's return to growth in a bear market, the high-yield REIT remains an attractive bargain.

Don't change your approach in a downturn

Market sell-offs create powerful emotions that investors have to control or they risk making less-than-ideal investment decisions. This is the time to stick to your core investment approach, which is likely to mean buying attractive companies with attractive yields, not reaching for yield and potentially jumping in to buy a falling knife. UDR, TD Bank, and W.P. Carey all have strong stories and strong businesses... and the types of dividends and yields that should help you sleep well at night when Wall Street has become a little messy.

Should you invest $1,000 in UDR right now?

Before you buy stock in UDR, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and UDR wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

American Express is an advertising partner of Motley Fool Money. Reuben Gregg Brewer has positions in Toronto-Dominion Bank and W.P. Carey. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.