What You Need to Know About European Dividend Stocks

For all the talk of dividend investing in recent years, it’s easy to lose sight of the fact that the average U.S. stock, as measured by the S&P 500, still yields a paltry 1.9%. Even the Vanguard Dividend Appreciation ETF (NYSE:VIG), a core long-term holding in my ETF portfolio — barely yields 2%, and this is a dividend-focused product. In a world where the 10-year Treasury note yields an almost laughable 1.5%, the dividends on U.S. stocks might seem downright rich in comparison. But for an investor looking to fund their retirement through portfolio income, they still don’t pay the bills.

Not surprisingly, many investors have gravitated to higher-yielding European stocks. The dividend yield on large-cap European stocks is more than double that of their U.S. counterparts; as a case in point, the Vanguard MSCI Europe ETF (NYSE:VGK) yields 4.3%, compared to the 1.9% offered by the SPDR S&P 500 ETF (NYSE:SPY). Still, those higher yields have offered little protection to investors who have seen their “safe” dividend paying stocks lose 20% of their value in a matter of weeks.

Source: InvestorPlace

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