Here's How Many Shares of the SPDR Portfolio S&P 500 High Dividend ETF (SPYD) You'd Need for $500 in Yearly Dividends

One of the better parts of investing in stocks is the passive income you can receive from owning dividend stocks or exchange-traded funds (ETFs). It's a way of receiving value from your stocks without relying solely on stock price appreciation, though both are appreciated.

A popular go-to dividend ETF is the SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD), which has a trailing yield of 4.46% at the time of this writing. At that yield, you'd need to own about 256 shares of SPYD to receive $500 in annual dividend income. At its current price of $43.86 per share, that would cost you around $11,210.

SPYD's 4.46% dividend yield is among the higher yields you'll find in a broad dividend ETF, but it makes sense given that the ETF tracks the top 80 high-dividend-yielding companies in the S&P 500 (an index of the 500 largest American companies).

By investing in a high-yielding dividend ETF like SPYD, you get a payout that's close to four times higher than the S&P 500 average, exposure to 78 companies spanning all 11 major U.S. sectors, and a cheap ETF whose expense ratio is only 0.07%. The latter works out to paying only $0.70 per $1,000 invested in SPYD, which is easily made up by the dividends you receive.

Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.