3 ETFs For Dividend Growth Investors

The world of income investing is primarily split between high-yield stocks and those that are consistently growing their dividends. The latter category exhibits companies with consistent profits and growth that are able to reliably return capital to shareholders in ever-increasing amounts.

While honing in on these quality stocks can be an arduous task, several ETFs have been developed that offer unique ways of accessing the dividend growth theme.

Vanguard Dividend Appreciation ETF VIG

This powerhouse income machine is actually the largest ETF of its kind, with $24.8 billion in total assets.

VIG invests in a portfolio of 163 large-cap stocks with histories of growing their dividends on a year-over-year basis. This fund includes well-known companies such as Wal-Mart Stores, Inc. WMT and PepsiCo, Inc. PEP as the two top holdings.

VIG sports a 30-day SEC yield of just 2.08 percent, but has shown a penchant for larger dividend distributions each year. In addition, this ETF features a rock-bottom expense ratio of just 0.10 percent.

WisdomTree Trust DGRW

WisdomTree U.S. Dividend Growth Fund is close to celebrating its two-year anniversary, and this fundamentally constructed index has been able to successfully accumulate over $400 million in assets during that time.

In order for companies to be accepted in DGRW, they must feature the best combined ranking of quality and dividend growth factors based on historical averages.

In addition, DGRW is dividend-weighted annually according to each stock's proportionate share of aggregate cash dividends. The end result is a diversified portfolio of 300 large and mid-cap companies with a markedly different make up than VIG.

This ETF charges a modest expense ratio of 0.28 percent and income is paid on a monthly basis to shareholders.

Related Link: ETF Spotlight: Dividend Aristocrat Index

iShares Trust DGRO

The newest member of the dividend growth family is iShares Core Dividend Growth ETF, a low-cost offering from BlackRock designed to be used as a core position. DGRO offers exposure to 333 companies that are screened for sustainable dividend growth factors across a diversified array of sectors and industries.

This ETF sports a 30-day SEC yield of 2.37 percent and an expense ratio of just 0.12 percent annually. DGRO has been in existence for just eight months, but is already making a name for itself as a solid basket of equity income holdings.

Disclosure: At the time this article was written, the author owned DGRO and VIG.