| Diversification | Single company risk; requires 20-30 stocks for diversification | Instant diversification across 25-100+ dividend payers |
| Yield Potential | Higher yields possible (3-7%+) with individual selection | Moderate yields (2-5%) from weighted average of holdings |
| Growth Potential | Can select fastest-growing dividend stocks (10-20% CAGR) | Moderate growth from blended portfolio (5-10% CAGR typical) |
| Dividend Cut Risk | High impact if single stock cuts dividend (100% loss on that position) | Low impact—individual cuts diluted across 25-100+ holdings |
| Management Required | Active monitoring of 20-30 stocks; quarterly earnings tracking | Minimal management—ETF automatically rebalances holdings |
| Costs | Trading commissions for each position (often $0 now) | Annual expense ratio (0.08-0.60%); built into NAV |