Exchange-traded funds (ETFs) make investing simple. With a few clicks of a button, you could quickly gain the opportunity to profit alongside a diversified collection of high-quality businesses.

In addition, select ETFs offer relatively easy ways to cash in on powerful economic trends, such as the artificial intelligence (AI) boom. Well-chosen funds could also provide you with bountiful and reliable passive income.

Read on to see why AI chip suppliers and high-yield dividend payers are particularly attractive stocks to buy today.

This ETF could help you profit from the AI revolution

The world runs on semiconductors. Laptops, smartphones, medical devices, modern cars and trucks, airplanes, satellites, and solar panels are just some of the products that require these essential components to function properly.

The microchips that underpin computer technology of all sorts are becoming even more valuable in the age of AI. The global semiconductor industry is poised to grow from $697 billion in 2025 to $1 trillion by 2030 and $2 trillion by 2040, according to Deloitte. Chip suppliers are set to see their sales and profits soar in the coming years.

The iShares Semiconductor ETF (SOXX -2.95%) offers you a convenient way to claim your share of this enormous and rapidly expanding market.

The fund is managed by BlackRock, one of the world’s largest investment companies, with assets under management of $12.5 trillion as of the end of the second quarter.

The ETF holds stakes in 30 stocks, all of which are key cogs in the global semiconductor supply chain. Leading chipmakers Nvidia, Advanced Micro Devices, Intel, Broadcom, and Taiwan Semiconductor Manufacturing stand among the fund’s largest holdings.

The ETF’s annual expense ratio is reasonable at 0.34%. That amounts to $3.40 for every $1,000 invested.

All told, the iShares Semiconductor ETF is a relatively effortless and low-cost way to position yourself to benefit from the AI-fueled chip boom.

This dividend ETF can help you build a lucrative passive income stream

Dividends are the sweet rewards of investing. A swell of cash payments pouring into your account year after year can drastically reduce your financial worries. Dividends can also help you pay for the things you enjoy.

Moreover, dividend stocks can add ballast to your diversified investment portfolio. Stocks that regularly pay out cash to their investors are generally less volatile than those that don’t. Dividend-payers also tend to outperform non-dividend-payers during bear markets. Better still, companies that can consistently grow their cash distributions often see their share prices rise in kind.

As its name suggests, the Vanguard High Dividend Yield ETF (VYM -0.09%) offers convenient access to a broad collection of income-generating stocks with above-average payouts. The fund’s annualized dividend yield of roughly 2.6% is more than twice that of the S&P 500 Index, making it an excellent source of passive income.

With positions in roughly 580 stocks across a range of sectors, the ETF also provides investors with the wealth-protecting benefits of diversification. Top holdings, which include dividend stalwarts such as JPMorgan Chase, ExxonMobil, and Walmart, further help to mitigate the risks for shareholders.

Best of all, Vanguard charges ultralow fees, so nearly all the ETF’s gains will be passed on to investors. The Vanguard High Dividend Yield ETF has an expense ratio of 0.06%, which amounts to just $0.60 per $1,000 invested annually.

JPMorgan Chase is an advertising partner of Motley Fool Money. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, JPMorgan Chase, Nvidia, Taiwan Semiconductor Manufacturing, Vanguard Whitehall Funds-Vanguard High Dividend Yield ETF, Walmart, and iShares Trust-iShares Semiconductor ETF. The Motley Fool recommends Broadcom and recommends the following options: short August 2025 $24 calls on Intel and short November 2025 $21 puts on Intel. The Motley Fool has a disclosure policy.

Investing in dividend stocks is a great way to steadily build your wealth. These companies can provide you with a solid base return that tends to grow over time as they increase their earnings and dividend payments. That combination of dividend income and earnings growth has historically added up to a much higher total return over the long term compared to non-dividend payers.

ConocoPhillips (COP -1.12%) and VICI Properties (VICI -0.15%) are two rock-solid dividend stocks worth adding more of right now or adding to your portfolio if you don’t already hold them. Here’s what makes them stand out.

The fuel to deliver high-octane dividend growth through the end of the decade

ConocoPhillips is on the cusp of a major growth wave. The oil and gas producer has invested heavily to transform its business into a cash-flow growth machine. It currently has decades of inventory with a supply cost below $40 a barrel. As a result, it’s producing lots of free cash flow at the current oil price point in the upper $60s. Meanwhile, its long-cycle investments in liquified natural gas (LNG) and Alaska should fuel robust free-cash-flow growth over the coming years.

The company’s 2024 merger with Marathon Oil has paid off even more than anticipated. The oil giant initially expected to capture $500 million in annual cost savings within the first year of closing the deal, which it subsequently doubled to $1 billion. It now expects to deliver $1 billion in additional cost and margin enhancements from this merger by the end of next year. On top of that, its investments in a trio of global LNG projects and Willow development in Alaska should add another $6 billion in incremental free cash flow to its annual total by 2029.

This surge in free cash flow will give ConocoPhillips more fuel to increase its already attractive dividend (at over 3%, it’s more than double the S&P 500‘s 1.2% yield). The company intends to deliver dividend growth within the top 25% of companies in the S&P 500 in the future. That high-octane growth rate from a company that already offers a high-yielding payout makes it a very attractive dividend stock to add to these days.

The high-end dividend growth should continue

VICI Properties has built one of the country’s largest experiential real estate portfolios. The real estate investment trust (REIT) invests in market-leading gaming, hospitality, wellness, entertainment, and leisure destinations. It leases the properties it owns to high-quality operating companies under long-term, triple-net leases (NNN), an increasing percentage of which escalates rents at rates tied to inflation (42% this year, rising to 90% by 2035). As a result, VICI Properties generates very stable and steadily rising rental income.

The REIT also invests in real estate-backed loans. These investments provide it with incremental interest income to support its dividend and often come with the option to acquire the underlying real estate in the future.

VICI Properties often partners with leading experiential companies. It provides them with capital to expand (through sale-leaseback transactions, real estate loans, and other financing), which supplies the REIT with new investment opportunities.

This strategy has paid big dividends for investors over the years. VICI Properties has increased its dividend payment every year since its formation seven years ago. It has grown its payout at a 7.4% compound annual rate, significantly faster than the 2.3% compound annual dividend growth rate of other REITs focused on investing in NNN real estate. With its dividend yield currently over 5% these days, VICI Properties is an attractive income investment. Meanwhile, with more portfolio growth ahead as its partners continue expanding, this REIT should provide investors with a lucrative and steadily rising stream of passive dividend income backed by its high-quality real estate portfolio.

Top-notch dividend stocks

ConocoPhillips and VICI Properties are great dividend stocks to add to these days. They currently offer higher-yielding dividends that should continue growing at above-average rates in the coming years. That positions these dividend stocks to produce attractive total returns from here.

Matt DiLallo has positions in ConocoPhillips and Vici Properties. The Motley Fool recommends Vici Properties. The Motley Fool has a disclosure policy.

Not all dividend stocks are boring. In fact, over the past 12 months, some of the top-performing shares on Wall Street have been dividend stocks. Let’s take a look at two such companies and see why they have performed so well, and why now might be the right time for investors to buy.

IBM

First, there’s International Business Machines (IBM 0.72%). With a staggering total return of more than 66% over the last 12 months, IBM stock has been on fire. It pays a quarterly dividend of $1.68, generating a dividend yield of about 2.4%. The recipe for its recent success comes down to its broad-based appeal; income-seeking investors appreciate the company’s consistent dividend payments, and growth-oriented investors like its steady growth prospects.

Let’s look at the dividends first. IBM’s history of dividend payments stretches back more than a century, to 1916. Moreover, it has increased its quarterly dividend payment for 30 years in a row. Needless to say, that makes income-seeking investors very happy. After all, it’s one thing for a company to make a dividend payment. It’s quite another for regular and increasing dividend payments to be ingrained into the corporate culture.

Turning to IBM’s fundamentals, the company has the free cash flow to easily support its dividend regime. Over the past 12 months, IBM reported $12 billion in free cash flow. Dividend payments amounted to about $6.2 billion.

If there’s an area where value investors should keep a close eye on, it’s IBM’s balance sheet. The company does carry a significant amount of debt, totaling nearly $67 billion, with cash on hand of about $17 billion. Moreover, the company’s net debt has been creeping upwards in recent years.

However, this leads us to IBM’s growth prospects. The company wants to be a player in the new artificial intelligence (AI) market. That could lead to revenue growth, which has been hard to come by for IBM. For example, over the last 10 years, IBM’s revenue has actually decreased, from $87 billion in 2015 to $63 billion today. Yet, observers expect that trend to reverse. According to analyst estimates compiled by Yahoo! Finance, IBM’s revenue should rise to $66 billion this year and $69 billion by 2026.

IBM remains a solid choice for investors seeking a stock that combines decent dividend income with modest growth prospects.

AT&T

Then, there’s AT&T (T -0.04%). As of this writing, AT&T’s stock boasts a total return of 61% over the last 12 months, handily outpacing the S&P 500‘s total return of 11% over the same period. AT&T’s outperformance comes thanks to the company’s renewed focus on its core wireless and fiber businesses, and its improving fundamentals.

AT&T has shed ancillary businesses like DirecTV and Time Warner in recent years, concentrating once again on wireless and fiber connectivity. What’s more, by rededicating itself to these businesses and their supporting infrastructure, AT&T is better aligning its business with customer demands for faster, reliable service. This is in contrast to prior years, when the company seemed just as interested in cross-selling satellite or streaming services as it was in delivering reliable wireless coverage.

Regarding fundamentals, AT&T’s balance sheet is improving. One of the biggest drags on AT&T over the last decade has been its staggering debt load. As of 2018, the company’s net debt was around $180 billion. However, under its current management, the company has drastically reduced its net debt, which now stands at $121 billion. While still immense, that represents a decrease of roughly 32%.

Turning to cash flow, AT&T generates about $19 billion in free cash flow every 12 months and pays out slightly over $8 billion in dividend payments. While investors would love to see even more free cash flow to fund capital investments, debt reduction, and increased dividend payments, the current rate is enough to sustain AT&T’s current payouts.

AT&T has gotten back to basics, which is helping its stock soar. The stock pays a quarterly dividend of $0.28/share, or a dividend yield of about 4%. Investors who have previously overlooked the stock might want to consider it now, as the company continues its rebound.

Jake Lerch has positions in AT&T and International Business Machines. The Motley Fool has positions in and recommends International Business Machines. The Motley Fool has a disclosure policy.

Stocks experienced significant volatility this year, which can sometimes make it challenging to keep a positive outlook. In times like these, it’s worthwhile to remember that stock-market swings, even full-blown crashes, are par for the course; they don’t change the fact that over the long run, equities generate competitive returns.

So it still makes sense to buy shares of companies that can deliver strong performances over five years or more. It’s even better if they’re trading at a discount, like Target (TGT -3.95%) and Bristol Myers Squibb (BMY -1.95%). These two top dividend stocks have not performed well this year, but they remain attractive long-term investments.

1. Target

Retail giant Target has had a challenging year. The company’s financial results have been subpar, with revenue moving in the wrong direction and guidance weak; investors have responded in kind by selling off the stock. Also not helping matters are uncertainty about the economy, which could negatively impact consumer behavior, and the potential impact of tariffs. There was also a recent national short-term boycott of Target related to management pulling back on its diversity, equity, and inclusion (DEI) initiatives.

Investors should monitor those issues, but there are still bright spots to focus on. Some of Target’s troubles are due to economic factors beyond its control. The company can weather the storm. Once it passes, things should improve, especially as it continues to implement critical initiatives that will help it turn the corner.

Target recently launched an Enterprise Acceleration Office, led by chief operating officer Michael Fiddelke. It hopes this will help boost productivity and efficiency across the business, notably by implementing tech-based changes.

Elsewhere, Target could continue to leverage digital business to drive growth. In the first quarter, Target’s net sales decreased to $23.8 billion, a 2.9% decline compared to the year-ago period. Comparable sales decreased 3.8%; however, digital comparable sales rose 4.7%.

Target Circle 360 is a paid subscription option launched just last year that is already helping boost the company’s digital business. It grants subscribers various perks, including free same-day and two-day shipping. And Target’s digital business includes Roundel, a personalized advertising unit.

With these initiatives, Target is adapting to the modern commerce landscape. In my view, there’s significant room for growth for the company in digital sales and ad revenue, given that Target remains a leading retail giant, even if it takes some time for the company to recover.

Meanwhile, Target’s recent forward price-to-earnings (P/E) ratio of 13.7 looks more than reasonable compared to the average for consumer staples stocks, which is 22.6.

The company also has a superior dividend profile. Target is a Dividend King that has raised its payouts for 53 consecutive years. Its forward yield of 4.6% (the average for the S&P 500 is 1.3%) and cash payout ratio of 45.7% also look attractive. The stock might still experience some struggles in the near term due to economic (and other) issues, but Target should reward patient investors down the line.

2. Bristol Myers Squibb

Bristol Myers Squibb, a leading pharmaceutical company, has encountered significant patent cliffs over the past few years, and it isn’t out of the woods just yet. There are still several cliffs on the horizon for the drugmaker, including one for Opdivo, a cancer drug that’s one of its top-selling therapies and should lose U.S. patent exclusivity in 2028.

However, BMS (as it is also known) has devised a plan to get around this issue. It developed a subcutaneous version of Opdivo that will extend the drug’s patent life while overlapping with the original’s indications. This version, dubbed Opdivo Qvantig, earned approval from the U.S. Food and Drug Administration in December.

Meanwhile, the company has earned important brand-new approvals in recent years. One of the most important is Reblozyl, a therapy for anemia in patients with beta-thalassemia (a rare blood disease). In the first quarter, Reblozyl’s sales increased by 35% year over year to $478 million. Opdualag, another newer cancer medicine, generated $252 million in sales, a 23% increase compared to the same period last year.

Revenue declined by 6% year over year in the first quarter to $11.2 billion. But as newer products gain traction and the company earns approval for other new drugs, it should be able to reverse course.

Turning to BMS’ dividend record, the company’s relatively poor performance in recent years has pushed its forward yield to a juicy 5.2%. BMS has increased its payouts by 67.6% over the past decade, and currently boasts a modest cash payout ratio of around 35%.

Also, the stock’s forward P/E of 7 makes it dirt cheap at current levels; the healthcare sector‘s average tops 16. Despite the headwinds it’s encountered, Bristol Myers Squibb is still a buy for dividend seekers.

Since the pandemic began, the stock market has proven to be erratic, plunging at times only to quickly recover and launch into fresh bull markets. Today, with plenty of new uncertainty due to issues including President Donald Trump’s trade wars, U.S. fiscal concerns, and the concerning trajectory of the U.S. economy, more volatility is certainly on the docket. That’s why investors may want to check out some dividend stocks, which can provide reliable passive income. The returns of dividend stocks can be much more dependable than those of non-payers, especially if you choose ones with good track records and the ability to grow their earnings and free cash flows so they can keep regularly increasing their payouts.

Here are two dividend stocks that meet those criteria that investors can feel comfortable buying and holding for the next two years.

Nike: A turnaround that will hopefully pay investors more for their patience

The iconic footwear and apparel company Nike (NKE 0.22%) has been less than iconic as a stock lately. It’s now down by about 39% over the last five years (as of June 4). Intensifying competition in the footwear and apparel space, struggles with the brand, and an excessive focus on digital promotions and sales have resulted in the company underperforming in recent years.

To change its trajectory, the board hired longtime Nike veteran Elliot Hill out of retirement to take the helm, and Nike is now deeply entrenched in his turnaround plan. Hill is focused on getting the company back to what it does best — renewing its intense focus on the brand, leading the way on product innovation, and reactivating and improving its sales relationships with wholesalers. Hill also said earlier this year that Nike will be focused on five product areas — running, basketball, football, training, and sportswear — and three markets: the U.S., the United Kingdom, and China.

But as some analysts have pointed out, Nike’s turnaround could take longer than expected, especially if the global trade war continues or if the U.S. economy tips into a recession. A longer turnaround could make it difficult to entice investors to buy and hold the stock, which is why Nike is likely to make paying and raising its dividend a priority. Its yield of about 2.6% at the current share price isn’t bad, but it trails most Treasury yields right now and over the past few years.

In November, Nike increased its quarterly dividend by 8%, marking the 23rd consecutive year the company has hiked the payout. In a couple more years, Nike is likely to join an exclusive club — the Dividend Aristocrats®, which are S&P 500 companies that have increased their payouts for a minimum of 25 straight years. (The term Dividend Aristocrats® is a registered trademark of Standard & Poor’s Financial Services LLC.)

Its ascension into that group will give Nike added some credibility among dividend investors. Nike also has a trailing 12-month free cash flow yield of 5.66%, more than double its current dividend yield.

Nike has a good dividend track record and clear incentives to keep raising its payouts to reward shareholders for their patience. If its turnaround is successful, that should also enable the company to grow earnings and free cash flow, which will also bolster its capacity to pay higher dividends.

Wells Fargo: Finally on the offensive after seven years

If you’ve followed Wells Fargo (WFC 1.99%), then you know that the bank has been on a bumpy ride over the last decade. In 2016, it came to light that large numbers of employees at the bank had been opening banking and credit card accounts in customers’ names without those customers’ authorization. The scandal evolved into a reputational nightmare for Wells Fargo and cost it billions of dollars in fines and lost profits. Regulators put various restrictions and consent orders on the bank to monitor its actions. In addition, the Federal Reserve in 2018 put an asset cap on it, preventing it from growing its balance sheet above $1.95 trillion — limiting its ability to expand, pursue acquisitions, and make more money. 

In 2019, the bank brought on Charlie Scharf to take over as CEO, and he did a tremendous amount of work to overhaul the bank’s regulatory infrastructure and leadership team. Scharf also significantly cut expenses, sold off non-core assets, and ramped up higher-returning businesses like investment banking and credit card lending.

This year, after Trump returned to the White House, banking regulators under his administration quickly terminated the consent orders that were put in place to monitor its behavior in the wake of the scandal, and just recently lifted the asset cap. That’s a massive deal for the bank, which can now begin to grow its balance sheet again and go on the offensive in the financial services market.

During the pandemic, Wells Fargo was one of the few banks forced to cut its dividend due to regulations put into place by the Federal Reserve. While the bank has been able to regrow its payout, its yield still sits in the bottom half of its peer group.

JPM Dividend Yield data by YCharts.

Furthermore, broader deregulation of the banking sector from Trump and his administrators is likely on the way. I suspect the largest banks will eventually have much lower regulatory capital requirements than they have now, which will allow them to return more capital to shareholders. Furthermore, Wall Street analysts on average currently expect Wells Fargo to grow its diluted earnings per share by about 8% this year and by close to 14% next year, according to data provided by Visible Alpha. Over the last 12 months, Wells Fargo’s dividends only consumed about 31% of earnings, so it should have plenty of opportunities to keep growing its payouts in the coming years.