2 High-Yield Dividend ETFs You Can Buy With $1,000 in September and Hold Forever

Key Points

• Growth stocks have been leading the market higher, but dividend-paying stocks have a place in a portfolio.

• The Schwab U.S. Dividend Equity ETF is a great way to buy a collection of top-quality dividend-paying stocks.

• Thanks to improvements in MLPs, the Alerian MLP ETF is a great way to invest in this area and get a high yield.

• 10 stocks we like better than Schwab U.S. Dividend Equity ETF ›

The market just keeps grinding higher and big tech has been doing most of the heavy lifting, which means a lot of portfolios have ended up way more tilted toward growth stocks than people probably realize. Growth stocks have worked for a long time, but these cycles don't last forever. If you look back over history, there have been long stretches, like in the 1980s and again after the dot-com bubble, where value stocks were the ones leading the way.

That's why it makes sense to use periods like this to start gradually adding some income-paying positions to balance things out. Dollar-cost averaging works great here because you don't have to worry about timing the market perfectly; you just keep putting money to work and let compounding do its thing over time. And best of all, you can start with a low amount, like $1,000.

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

Let's look at two great dividend-focused exchange-traded funds (ETFs) to buy right now.

Image source: Getty Images.

Schwab U.S. Dividend Equity ETF

The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is built for investors who want quality companies with strong balance sheets and growing dividends, not just the highest yielders. It tracks the Dow Jones U.S. Dividend 100 Index, which screens for cash flow to total debt, return on equity (ROE), forward dividend yield, and five-year dividend growth rate, so you avoid the lower-quality names that sometimes sneak into dividend funds.

The result is a portfolio of about 100 companies tilted toward consumer staples, healthcare, and financials, which are sectors that can be less volatile and have steadier free-cash-flow streams than many growth stocks. The ETF currently yields close to 4%, which is solid whether you want to reinvest those payouts or take them as income.

Over the past decade, this ETF has returned over 12% annually, which is actually better than a lot of other value funds. With an expense ratio of just 0.06%, your expenses are also low.

The Schwab U.S. Dividend Equity ETF probably isn't going to deliver eye-popping short-term returns like a hot tech stock, but it can provide stability and consistent income.

Alerian MLP ETF

If you're looking for even more yield and don't mind owning energy stocks, the Alerian MLP ETF (NYSEMKT: AMLP) is another good option. This one holds a basket of midstream energy companies set up as master limited partnerships (MLPs). These companies operate pipelines, storage assets, and processing facilities, so they're more like toll roads that collect fees on the volumes moving through the system rather than betting on oil and gas prices.

Midstream companies are capital-intensive business, but they generally have long-term contracts in place that help produce steady cash flow that these companies then pay out as distributions. The Alerian MLP ETF has a trailing yield of about 8.2%, which is one of the highest you'll find in an ETF.

The midstream space has cleaned itself up a lot over the past decade. Incentive distribution rights that used to favor general partners have mostly been eliminated, balance sheets are stronger, and companies are funding growth projects with cash flow instead of constant equity raises. Coverage ratios are also better, meaning distributions are more secure, and leverage has come down across the sector.

Despite all those improvements, valuations are still below pre-pandemic levels, with many of AMLP's biggest holdings trading around or under 10 times enterprise value to earnings before interest, taxes, depreciation, and amortization (EBITDA). That compares to the MLP group trading at a 13.7 EV-to-EBITDA average multiple between 2011 and 2016.

The ETF's performance has been strong lately, generating an average annual return of 24.7% over the past five years. For investors who want high income and solid distribution growth, AMLP gives you exposure to some of the best-run MLPs while avoiding the headache of K-1 forms.

Bottom line

In a market sitting at all-time high valuations that is being led by growth stocks, the Schwab U.S. Dividend Equity ETF and Alerian MLP ETF offer an attractive alternative to add some balance when the market eventually turns more toward value stocks. Start investing in them with a small amount, but continue to invest monthly through dollar-cost averaging to help create long-term wealth.

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:

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 $661,694!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,082,963!*

Now, it’s worth noting Stock Advisor’s total average return is 1,067% — a market-crushing outperformance compared to 189% 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 September 15, 2025

Geoffrey Seiler has positions in Alps ETF Trust-Alerian Mlp ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.