You can reduce the investment risk by buying a Dividend ETF rather than buying several individual dividend stocks. The VanEck Vectors Morningstar Developed Market Dividend Leaders ETF screens these stocks for resilience, seeking to avoid those that might cut payouts. This is done via 3 criteria:
Dividend has been paid-out in the last 12 months
You would only invest in companies which have proven to pay out dividends in the last 12 months.
During the last 12 months, dividend per share was not lower than it was 5 years ago
Indicating realized dividend growth.
The expected forward dividend payout ratio is less than 75%
Avoiding situations in which companies pay-out untenably high dividends.
The ETF is also widely diversified across 100 of the top dividend payers globally.
Risk of Dividend Stocks: Investing is subject to risk, including the possible loss of principal. Investors should be aware of the Main Risk Factors such as foreign currency risk and equity market risk, which are described below and in the sales prospectus.