How are dividends done when it comes to ETFs? For example SPY?

Question

I've been wondering something. How are dividends paid when you own shares in an ETF?

For example lets use SPY. It includes companies like GE, Exxon, etc.. Say you own 10 shares in the ETF. Exactly what would the dividend look like quarterly?

This isn't a homework problem or anything. I know it might seem like that but it's just something I'm curious about. I haven't come across anything that really addresses this. I understand how it would work in regards to a single stock but not so much with ETFs.

Would you receive dividends from the companies in the ETF or simply just the ETF? In that it would be just like as if you owned a single stock of something?

If that is the case (if would be as if you owned just a single stock), and you aren't worried about so much growth and diversity but dividends, would it be better to own individual stocks instead of an ETF?

Thanks

Answer 1

SPY dividends are paid monthlys, and should be reinvested (Dividend investment Plan).

Div'd are paid to the brokerage account where the stock is held.

SPY div is currently 1.99% a year / by 4 quarters is .4975%

The div rate you get is determined on the price you paid for SPY. I won't know that number, but if you paid close to recent price it is prob close to that rate.

http://finance.yahoo.com/q?d=t&s=SPY

For most people I would suggest owning and dollar cost averaging into SPY where you have 500 stocks than owning just one or a few stocks.