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Chevron Corportion

Investing: Earn more with dividend-paying stocks

Many firms are paying generous yields today and are likely to boost their dividends in the future. You can find plenty of good funds that focus on dividends. Start with Vanguard Dividend Growth (symbol VDIGX), a member of the Kiplinger 25. Its biggest holdings at last report were United Parcel Service, UnitedHealth Group and insurer ACE Ltd. The fund yields 2 percent. For more income, consider Schwab U.S. Dividend Equity ETF (SCHD), which yields 2.9 percent. Although the ETF owns dividend growers, its main emphasis is on stocks with steady records of paying dividends; its biggest holdings are Chevron, Home Depot and Intel.

But, says Josh Peters, editor of the Morningstar...