Retirees Should Know The XLU Utility ETF Has Paid Dividends Every Year Since 1999 Without Interruption

"The Utilities Select Sector SPDR Fund ( NYSE:XLU) generates income by holding dividend-paying utility companies and passing those dividends to shareholders. With 99.5% of assets concentrated in the utilities sector, the fund functions as a pure play on regulated infrastructure companies. The current 2.75% yield comes with minimal costs, as the fund's low 0.08% expense ratio ensures nearly all dividend income reaches investors."

"NextEra demonstrates strong dividend sustainability through its conservative approach to capital allocation. The company maintains a payout ratio of 69.1%, which provides substantial cushion for future increases. This financial discipline has enabled management to raise quarterly payments by roughly 10% annually, supported by earnings growth of 25.8% that gives the company flexibility to both reward shareholders and fund infrastructure investments."

XLU provides focused exposure to dividend-paying utilities, with 99.5% of assets in the utilities sector and a current 2.75% yield. The fund's 0.08% expense ratio preserves most dividend income for shareholders. Dividend continuity depends on the financial health of underlying companies, led by NextEra Energy (14.06%), Southern Company (7.46%) and Duke Energy (7.13%). NextEra's 69.1% payout ratio and roughly 10% annual dividend growth are supported by strong earnings performance. Southern and Duke have enacted modest quarterly increases and maintain manageable payout ratios with long records of uninterrupted payments. Declining 10-year Treasury yields lower opportunity cost and ease refinancing pressure for utilities.

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