Want Decades of Passive Income? Here Are 2 ETFs Worth Owning Forever.

If you want to own a consistent income-producing machine in your portfolio, you need to focus on stocks with healthy balance sheets, strong cash flows, and a commitment to dividend sustainability. Anything other than that, and you risk inconsistent distributions or even dividend cuts if you take yield chasing too far. Those factors are as important now as they have been at any point since 2022. That was the last time high inflation and high interest rates beat up tech, growth, and low-quality stocks. It was the durable, defensive stocks that held up well and even generated gains in some cases. The market’s focus is still on tech and artificial intelligence (AI) stocks, but long-term-oriented portfolios are benefiting from smart dividend-income strategies. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue » If you don’t want to go through the hassle of picking individual winners, a number of exchange-traded funds (ETFs) do the work for you and do it well. They target stocks that demonstrate long-term dividend growth, balance sheet quality, and high yield. Those ETFs that consider more than one of these factors are especially attractive and can help ensure years of consistent dividend income from your portfolio. Here are two dividend ETFs that do it as well as anyone. Image source: Getty Images. Schwab U.S. Dividend Equity ETF The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is one of my favorite dividend ETFs due to its multipronged approach that considers dividend growth, high yield, and financial health. By using all three factors as cross-checks, the fund’s selection process can identify some of the best dividend stocks in the world. The big mega-cap tech stocks that do have at least some dividend history, such as Broadcom, Microsoft, and Apple, generally don’t make the cut here because of the high yield focus. That means tech accounts for only a modest 11% of the portfolio and is the fifth-largest sector weighting overall. Consumer staples, healthcare, and energy, however, account for a whopping 55% of the fund. The defensive nature of this ETF is what makes it a great choice for long-term dividend income. People will always need consumer and healthcare products, so volatility tends to be less cyclical. Higher yields can be a little riskier, but the inclusion of quality and dividend growth qualifiers helps ensure the sustainability of this fund’s yield. Not only do you get consistent income, but you also get high consistent income. Story Continues The Schwab U.S. Dividend Equity ETF has an expense ratio of 0.06% and a yield of 3.2%. iShares Core High Dividend ETF Technically, the iShares Core High Dividend ETF (NYSEMKT: HDV) only selects stocks based on a pair of Morningstar quality measures — the economic moat and distance-to-default ratings. For stocks that clear those screens, the 75 highest-yielding stocks are selected and ultimately weighted by total dividends paid. This fund has even less tech exposure — just 8% of the portfolio overall — and for similar reasons as the Schwab U.S. Dividend Equity ETF. The trio of consumer staples, healthcare, and energy accounts for more than 60% of this portfolio, making it even slightly more concentrated. There is some modest overlap between these two funds, both in sector allocations and individual holdings, so expect similar performance and risk exposures. One thing to note about this ETF compared to the Schwab ETF is that its historical dividend growth rate is much lower. That isn’t surprising, since dividend history isn’t a criterion for inclusion, but it’s reasonable to expect that investors in this fund could see their income grow at a slower rate. The iShares Core High Dividend ETF has an expense ratio of 0.08% and a yield of 3%. The great thing about both of these ETFs is that they’re built on a high-quality foundation and tilt their portfolios toward income. It may only look like a minor difference, but an ETF that has a 3% yield generates twice the income of one with a 1.5% yield. That’s a meaningful improvement. And it makes both of these ETFs ideal for generating sustainable high yields for decades to come. Should you buy stock in Schwab U.S. Dividend Equity ETF right now? Before you buy stock in Schwab U.S. Dividend Equity 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 Schwab U.S. Dividend Equity 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 $417,305!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,293,148!* Now, it’s worth noting Stock Advisor’s total average return is 936% — a market-crushing outperformance compared to 207% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of June 19, 2026. David Dierking has positions in Apple and Schwab U.S. Dividend Equity ETF. The Motley Fool has positions in and recommends Apple, Broadcom, and Microsoft. The Motley Fool has a disclosure policy. Want Decades of Passive Income? Here Are 2 ETFs Worth Owning Forever. was originally published by The Motley Fool



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