If you’re looking for a broad stock market investment that will also deliver dividend income to you, you might want to consider the Vanguard Total Stock Market ETF (VTI -0.09%). It’s an exchange-traded fund (ETF), which means it’s a fund that trades like a stock. It’s also an index fund, encompassing not just the 500 big American companies in the S&P 500 index but just about all of the U.S. stock market — more than 3,600 stocks.

The Vanguard Total Stock Market ETF pays dividends, too, and recently sported a dividend yield of 1.2% — but whereas most healthy and growing companies pay a fixed dividend amount until they increase it, this ETF’s payout fluctuates a fair amount, as the companies in it change what they pay.

But let’s assume a 1.2% yield. If you invest, say, $1,000, you’ll receive around $12. So to collect $500 in dividend income, you’d need about 42 times that — meaning a stake worth roughly $42,000. That would mean some 130 shares.

To be clear, you can collect much more in dividend income from various high-yield stocks and even some good dividend-focused ETFs. But the Vanguard Total Stock Market ETF can still serve a useful role in your long-term portfolio, having you invested in pretty much the entire U.S. market — and, therefore, most of the U.S. economy — including stocks from Amazon (NASDAQ: AMZN) to ZIM Integrated Shipping Services (NYSE: ZIM). So if you’re bullish on the future of e-commerce and international trade, not to mention scores of other businesses, this ETF has you covered. (Note that there are reports that ZIM may be taken private. And Amazon investors are expecting its investments in artificial intelligence to make it even more efficient.)

It has more to recommend it, too, such as a low expense ratio (annual fee) of just 0.03%, costing you $3 per $10,000 invested per year.

Selena Maranjian has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Vanguard Total Stock Market ETF. The Motley Fool recommends Zim Integrated Shipping Services. The Motley Fool has a disclosure policy.

 

Anders Bylund has positions in Nvidia and The Trade Desk. The Motley Fool has positions in and recommends Nvidia and The Trade Desk. The Motley Fool has a disclosure policy.

Ah, 10 years ago. It was 2015, and selfie sticks and hoverboards were all over. Apple debuted its Apple Watch to much fanfare, and…perhaps you invested in shares of Zoetis (ZTS 0.95%) stock? If you did, here’s how you would have fared over the past decade.

You would have done pretty well: Your investment would have grown by a total of 227%, which is an average annual rate of 12.6%. So, $1,000 invested 10 years ago would now be $3,270. That might please you, if you’re aware that over many decades, the stock market has averaged annual gains of close to 10%. Unfortunately for Zoetis investors, though, over the past decade, the S&P 500 averaged annual gains of 12.7%, a smidge above Zoetis’ returns.

Worse still, if you’d only held Zoetis stock for the past one, or three, or five years, you would have lost money. Zoetis shares sank by an annual average rate of 18.7%, 4.25%, and 0.43%, respectively, over those periods.

Don’t despair, though — because anyone buying or holding onto Zoetis shares right now has plenty to look forward to, as the company has lots of growth potential. Recall that Zoetis used to be the animal health division of Pfizer, specializing in vaccines and diagnostic equipment and the like, and was spun off in 2013. Today it’s leading in market share across multiple animal health segments and it has made some strategic acquisitions, as well.

Another appealing detail is that Zoetis is somewhat recession-proof, because taking care of animals’ health is not optional for many people. Livestock need to stay healthy for business purposes and pets are often considered valuable members of families.

Finally, Zoetis is a dividend-paying stock, with a recent dividend yield of 1.3%. That may not seem like much, but the total annual payout, recently $1.93 per share, is up from $1.30 in 2022 and $0.50 in 2018. Shares seem undervalued at recent levels, too, with the recent forward-looking price-to-earnings (P/E) ratio of 24 is well below the five-year average of 32.

Selena Maranjian has positions in Apple and Pfizer. The Motley Fool has positions in and recommends Apple, Pfizer, and Zoetis. The Motley Fool has a disclosure policy.