Latest news with #SCHD
Yahoo
14 hours ago
- Business
- Yahoo
SCHD Is a Popular Dividend ETF for Passive Income. But Is It the Best?
The Schwab U.S. Dividend Equity ETF focuses on companies that pay high dividend yields and have a track record of consistency. Its average dividend yield over the past five years is over twice as high as the S&P 500's. The ETF is less diversified than other broad market ETFs, so it may be best used as a supplemental holding. 10 stocks we like better than Schwab U.S. Dividend Equity ETF › There's no shortage of exchange-traded funds (ETFs) on the stock market today, covering everything from specific indexes and industries to geographic regions and investment strategies. Regarding the latter, there has been a jump in popularity of dividend-focused ETFs, including the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). For those looking for consistent dividend income, is the SCHD the best ETF on the market? For many investors, the answer could be yes. Of course, there's no "perfect" stock or ETF, but SCHD has shown it has the tools needed to be a great addition to the portfolio of anyone who wants a mix of stability and above-average dividend payouts. SCHD tracks the Dow Jones U.S. Dividend 100 Index, which focuses on high dividend-yield stocks with a track record of consistent, growing payouts and strong business fundamentals. Those criteria mean that most of the stocks held in SCHD tend to be large companies with impressive cash flows. Here are the SCHD's top 10 holdings and what percentage of the fund they represent: Company Percentage of the ETF Texas Instruments 4.27% Cisco Systems 4.22% ConocoPhillips 4.17% Chevron 4.15% Merck & Co. 3.97% AbbVie 3.93% Altria Group 3.91% Home Depot 3.85% Verizon Communications 3.84% Coca-Cola 3.84% Source: Charles Schwab. Percentages as of June 27. SCHD is slightly top-heavy, with the top 10 holdings accounting for 40% of the fund, but they're relatively evenly distributed among themselves. Compare this to the S&P 500 index, where Nvidia, Microsoft, and Apple alone can easily make up over 20% of the index, or the Nasdaq-100, where they can make up a quarter. Being led by what many may see as "boring" companies also helps keep SCHD relatively stable during down periods. SCHD's current dividend yield (as of June 27) is around 3.9%, slightly above its average for the past five years. Both its current dividend yield and five-year average yield are more than twice that of the S&P 500. SCHD's low 0.06% expense ratio also ensures that you keep more of the ETF's total returns for yourself, rather than paying them in fees. That's only $0.60 in fees per $1,000 invested in the fund, which is lower than many comparable ETFs. SCHD is a great option for investors looking for passive income. It offers a powerful trifecta: a high dividend yield, a portfolio of high-quality companies, and a low expense ratio. You can't ask for much more. That said, SCHD is probably best suited as a supplemental piece in most investors' portfolios, rather than as the foundation. The income component is valuable, but the underlying index's criteria for inclusion mean lots of great companies are left out. SCHD is also less diversified than broad market funds like the Vanguard S&P 500 ETF or Vanguard Total Stock Market ETF. For income investors, though, SCHD is one of the best ETF options on the market. Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $722,181!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $968,402!* Now, it's worth noting Stock Advisor's total average return is 1,069% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Stefon Walters has positions in Apple, Coca-Cola, Microsoft, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends AbbVie, Apple, Chevron, Cisco Systems, Home Depot, Merck, Microsoft, Nvidia, Texas Instruments, Vanguard S&P 500 ETF, and Vanguard Total Stock Market ETF. The Motley Fool recommends Verizon Communications and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. SCHD Is a Popular Dividend ETF for Passive Income. But Is It the Best? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
HDV Is a Popular Dividend ETF for Passive Income. But Is It the Best?
Exchange-traded funds (ETFs) provide a convenient way for investors to get a basket of quality dividend stocks. The iShares Core High Dividend ETF is one of the most popular high-yield ETFs. There are several dividend ETFs that offer great yields, but one slightly beats out the competition. 10 stocks we like better than iShares Trust - iShares Core High Dividend ETF › Artificial intelligence (AI), big tech, and cryptocurrencies all have their fans among investors, and with good reason. All can add to a well-balanced portfolio that will help make you richer over time. But you shouldn't forget about income investing -- buying stocks that reward you for holding them by paying a nice, sizable dividend on a regular basis. Rather than trying to pick one or two (or 12) dividend stocks, many investors turn to exchange-traded funds (ETFs) to do the heavy lifting. Dividend ETFs are popular go-to options for investors who are seeking a passive income flow. One of the most popular is the iShares Core High Dividend ETF (NYSEMKT: HDV), a fund that has more than $11 billion in assets and trades roughly 400,000 shares per day. HDV tracks the Morningstar Dividend Yield Focus Index, which screens for companies with strong balance sheets and a wide economic moat -- exactly what a passive income investor is looking for. It holds 76 stocks, with top holdings including ExxonMobil, Johnson & Johnson, AbbVie, Chevron, AT&T, and Coca-Cola. Those are important names to know, because fully 50% of the fund is weighed in its top 10 holdings -- that means the fund can be a little overweight toward top names, but those companies are also some of the best dividend stocks you can buy. HDV offers a dividend yield of 3.7% and has a minuscule expense ratio of 0.08, or $8 annually for each $10,000 invested. But HDV isn't your only option. There are several quality ETFs in the market that offer investors the opportunity to bring in regular income and provide instant diversification. Let's take a look at some of the alternatives: Statistic HDV SCHD VYM SPYD Price-to-earnings ratio 16.2 13.6 16.1 14.3 Price-to-sales ratio 2.3 1.4 1.7 1.3 Number of equity holdings 76 99 585 77 Dividend yield 3.7% 3.9% 2.9% 4.5% Expense ratio 0.08 0.06 0.06 0.07 Data sources: Morningstar, author research. Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD): This fund focuses on stable dividend-paying stocks by tracking the Dow Jones U.S. Dividend 100 Index. With 99 equities in its portfolio, SCHD has a lot of blue chip names, including Chevron, ConocoPhillips, Merck, Texas Instruments, and Cisco Systems. SCHD pays a dividend yield of 3.9%, and its expense ratio is a bit lower than HDV at 0.06. Vanguard High Dividend Yield Index Fund ETF Shares (NYSEMKT: VYM): Vanguard index funds are always popular picks, and they typically do a great job. VYM tracks the FTSE High Dividend Yield Index and is the most diversified on this list, holding 585 stocks. Top names include Broadcom, JPMorgan Chase, ExxonMobil, Walmart, and Procter & Gamble. While the expense ratio is slightly lower than HDV at 0.06, VYM also provides a lower yield at 2.9%. SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD): This ETF tracks the S&P 500 High Dividend Index, which is an equal-weighted index of the 80 highest-yielding stocks in the S&P 500. Top names here include Philip Morris International, Hasbro, AT&T, CVS Health, and Crown Castle. SPYD has the best yield of the ETFs that we're considering, coming in at 4.5%, and the expense ratio is 0.07. Honestly, there's no cut-and-dried answer here. SCHD has great blue chip names; VYM provides the best diversification; and SPYD has the advantage of an outstanding dividend yield. If I have to make a choice for a high-yield ETF, I'm going with the HDV ETF by a nose, for two simple reasons. First, it's outperformed the other ETFs on this list year to date, providing nearly a 5% gain. And second, the HDV provides the best dividend on a dollar-and-cents basis, paying out $0.91 during the past year. That's an important distinction when you think about holding on to a passive income ETF for a long time. To reiterate, this is a strong group of dividend ETFs. The best choice usually rests with the individual investor. But for me, HDV is the call. Before you buy stock in iShares Trust - iShares Core High Dividend ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and iShares Trust - iShares Core High Dividend ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor's total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Chevron, Cisco Systems, Crown Castle, JPMorgan Chase, Merck, Texas Instruments, Vanguard Whitehall Funds - Vanguard High Dividend Yield ETF, and Walmart. The Motley Fool recommends Broadcom, CVS Health, Hasbro, Johnson & Johnson, and Philip Morris International. The Motley Fool has a disclosure policy. HDV Is a Popular Dividend ETF for Passive Income. But Is It the Best? was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
3 days ago
- Business
- Yahoo
Why I Question SCHD's Role in My Portfolio -- Is There a Better Choice for Income and Growth?
Schwab's U.S. Dividend Equity ETF has underperformed other funds of late. The funds being held in comparison aren't actually all that comparable. The purpose of diversifying any portfolio is to limit the risk of inevitable but unpredictable change. These 10 stocks could mint the next wave of millionaires › As always, The Motley Fool cannot and does not provide personalized investing or financial advice. This information is for informational and educational purposes only and is not a substitute for professional financial advice. Always seek the guidance of a qualified financial advisor for any questions regarding your personal financial situation. If you'd like to submit your question for feedback, you can do so here. Do you own the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD), and if so, have you been disappointed by its recent performance? If your answer to both questions is yes, you're not alone. Plenty of people have been frustrated with its lack of progress versus the broader market. One of these disappointed investors recently asked an entire Reddit community about this fund's usefulness when there are so many other options available. Why SCHD? It loses to both SPY and JEPQ in total returnsby u/Malevin87 in dividends There's always more to the story than anyone can know through a single Reddit post. Since many investors are likely grappling with this very same question, however, some thoughts on the matter are in order. First, you're not imagining things. As the original poster's math suggests, SCHD is trailing alternative exchange-traded funds (ETFs) like the JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ: JEPQ) or the SPDR S&P 500 ETF Trust (NYSEMKT: SPY). Indeed, even adding its sizable dividend payments (its trailing yield is just under 4%) into the mix, the Schwab fund has consistently underperformed SPY and JEPQ since the middle of 2023. This doesn't necessarily mean a fund like the Schwab U.S. Dividend Equity ETF doesn't belong in your portfolio, though. Yes, Schwab's dividend fund is lagging. It has for a while. There's an underappreciated reason for that. The Dow Jones U.S. Dividend 100™ Index that it is meant to mirror holds a bunch of the market's very biggest dividend payers that have been out of favor for a couple of years now. The fund -- and index -- are highly exposed to consumer goods names like Altria, oil and gas giants such as Chevron, and industrial tech stocks like Texas Instruments. These are all fine companies. But they've just not been what investors have been clamoring for over the course of the past few years. Investors are still mostly in love with technology stocks that are heavily exposed to the artificial intelligence (AI) revolution. That's a big reason the JPMorgan Nasdaq Equity Premium Income ETF has done so well since 2023, when the AI movement really took hold. As the name suggests, JPMorgan's Nasdaq Equity Premium Income fund holds the same stocks you'll find in the Nasdaq-100 Index. They include Nvidia, Microsoft, and Broadcom, just to name a few. There's a slight twist with JEPQ. Its primary purpose is to generate distributable income to its owners by selling "covered" call options against the stocks the fund holds. The strategy for achieving this usually works quite well, too. The ETF's current annualized dividend yield stands at an impressive 14.5%. Make no mistake -- this strategy also ultimately means that this fund's performance trails the Nasdaq-100's. It's just an attractive investment because so much of the Nasdaq-100's gains are still able to be collected in the form of immediate and perpetual income. It's a completely different kind of investment than the Schwab U.S. Dividend Equity ETF, so its net performance should be different. The same can be said of SPY. This ETF is neither dividend-oriented nor growth-oriented. It's just meant to mirror the performance of the S&P 500, which encompasses 85% of the U.S. stock market's total market capitalization. That's why it's such a good market barometer. Of course, the same AI-centric technology names that dominate the Nasdaq-100 also dominate the S&P 500. That's why it's also outperformed SCHD for the past couple of years. So what? Performance is performance, after all, and JEPQ and SPY are performing when Schwab's U.S. Dividend Equity ETF isn't. The reason you diversify isn't to capitalize on current leadership. You diversify because you have no idea what the future holds, and your job as an investor is to maximize your potential upside while minimizing your risk of the unknown. More to the point, although the JPMorgan Nasdaq Equity Premium Income ETF and the SPDR S&P 500 ETF Trust may be leading the Schwab U.S. Dividend Equity ETF right now, that could change in an instant. That possibility is more real right now than you might realize, given the environment. While selling (or "writing") covered call options on the Nasdaq-100's stocks has worked well enough since 2023, the market's somewhat choppy sideways to slightly bullish trend favors this strategy. That's especially true in an environment with above-average volatility and rising interest rates, as we've seen lately. This rise in interest rates also works against dividend stocks, since the market will adjust their prices lower to push their dividend yields closer to bonds' yields. Given this, it's not surprising that SCHD has underperformed of late. But what if everything about this backdrop reverses? What if interest rates start to sink and/or the market's volatility starts mellowing out? Or what if a strong marketwide bull market takes hold? This situation would favor dividend stocks again, but also make JPMorgan's option-writing strategy even more difficult to execute, and relatively less productive than simply buying and holding. You won't see this shift coming before it happens. You'll only see it after the fact, when SCHD starts to perform better, and JEPQ starts to perform worse. This isn't to suggest that JPMorgan's covered call ETFs aren't worth owning, nor is it a guarantee that Schwab's dividend ETF is on the verge of recovery. That's the point. While an environmental shift is likely, we can't know when or to what extent it will take shape. That's why you remain diversified even when it's difficult to stick with a laggard and not double down on leaders. You're preparing for all possibilities by owning a little of everything, and not too much of anything. It's also worth considering that one year's time isn't actually very long when it comes to stocks. It may be too soon to come to a sweeping long-term conclusion here. That being said, in this particular instance, two of the three exchange-traded funds in focus are at the extreme opposite ends of the spectrum. There may be room for something else in between that isn't quite so dividend-oriented, but also not so tech-centric. For instance, while its dividend yield may be a modest 1.7%, the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) is based on the S&P U.S. Dividend Growers Index, which makes a point of not including the highest-yielding stocks just because they're more likely to underperform. Sure enough, this dividend fund has easily outperformed SCHD for the past couple of years. Even if it hasn't quite kept pace with JEPQ, it's at least been respectably close. High-quality dividend stocks do offer the capital growth that most investors also want. They do better in times of market weakness too, since their cash dividend payments usually remain unfazed. VIG is just one of several other ETFs that might be worth considering here, however. The Vanguard Growth ETF (NYSEMKT: VUG) wouldn't be a bad bet either, if income isn't actually an immediate concern. When a portfolio is well-diversified (as it should be) to protect an investor from the unknowable, the unexpected, and the unpredictable, one of those holdings is always going to lag. That's OK. That's the reasonable price you pay for the protection. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $409,114!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $38,173!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $713,547!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of June 23, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron, JPMorgan Chase, Microsoft, Nvidia, Texas Instruments, Vanguard Dividend Appreciation ETF, and Vanguard Index Funds - Vanguard Growth ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Why I Question SCHD's Role in My Portfolio -- Is There a Better Choice for Income and Growth? was originally published by The Motley Fool
Yahoo
3 days ago
- Business
- Yahoo
Is Schwab US Dividend Equity ETF the Smartest Investment You Can Make Today?
The Schwab US Dividend Equity ETF has a roughly 4% yield today. The exchange-traded fund has a fairly complex stock selection process. It has offered a growing income stream and capital appreciation over time. 10 stocks we like better than Schwab U.S. Dividend Equity ETF › For most investors, simple is good. The Schwab US Dividend Equity ETF (NYSEMKT: SCHD) is a simple way to invest in reliable, high-quality dividend stocks. After all, if you have a life to live, you probably don't want to spend all your free time poring over stocks. A roughly 4% yield and a unique stock selection process seal the deal when it comes to this smart investment choice. Here's what you need to know today. Before getting into the Schwab US Dividend Equity ETF's investment approach, it's important to get a good feel for what it has achieved. Many dividend investors are looking to create a reliable income stream to live on in retirement. So the goal is to own investments that produce reliable and hopefully growing dividends. Of course, a secondary hope is that the investment's value will rise as well, producing some capital appreciation. The chart above shows that dividend investors have gotten exactly what they wanted from this exchange-traded fund (ETF). The current dividend yield of roughly 4% is in line with a "rule of thumb" retirement withdrawal rate that has led many dividend investors to focus on creating a 4% yield from their portfolios. So, with that 4% yield, investors won't feel the need to touch the principal invested in the Schwab US Dividend Equity ETF. That can help with a feeling of financial security, or provide confidence that there will be money left to hand on to loved ones someday. All that comes from one simple investment with a tiny expense ratio of 0.06%. To be fair, the Schwab US Dividend Equity ETF has not performed as well as an S&P 500 index ETF on a total return basis. But that's not the goal of the ETF. The goal is to provide a reliable income stream with some capital appreciation, and it does that very well. You shouldn't buy any pooled investment just because of a few performance statistics. Just as with any other ETF or mutual fund, you are giving your hard-earned money to the Schwab US Dividend Equity ETF to manage on your behalf. You need to make sure you understand what is being done with that cash. In reality, the Schwab US Dividend Equity ETF is just tracking the Dow Jones U.S. Dividend 100 Index. What you really need to know is what that index does, which is actually fairly complex. First, it pulls out all the companies that have increased their dividends for at least 10 consecutive years. Then real estate investment trusts (REITs) are eliminated from consideration. This forms the starting pool from which the index is created. But the 100 stocks that make it into the index haven't been selected yet. The next step is to create a composite score for all of the stocks that pass the first round of screening. The score looks at cash flow to total debt, return on equity, dividend yield, and the company's five-year dividend growth rate. The 100 stocks with the highest composite scores are included in the index and are market-cap weighted. There's a lot going on there, but the point is that the Schwab US Dividend Equity ETF is focused on owning well-run and financially strong businesses that have attractive yields and strong histories of dividend growth. That's likely the same type of stock a dividend investor is trying to find. Buying the Schwab US Dividend Equity ETF gets you an entire portfolio of such investments with just one buying decision. That's simple, and it allows you to spend your time doing other things, like spending time with family or playing golf. The Schwab US Dividend Equity ETF isn't going to give you everything an investor dreams of, but no investment can do so. What it will do is provide you with an attractive income stream and, if history is any guide, slow and steady growth of capital over time. If that's your goal, it would be a smart choice to invest in the Schwab US Dividend Equity ETF today. Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor's total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Is Schwab US Dividend Equity ETF the Smartest Investment You Can Make Today? was originally published by The Motley Fool Sign in to access your portfolio
Globe and Mail
17-06-2025
- Business
- Globe and Mail
SCHD ETF News, 6/13/2025
How is SCHD stock faring? The Schwab U.S. Dividend Equity ETF (SCHD) is up 1.47% in the past five days and 4.85% over the past year. Confident Investing Starts Here: According to TipRanks' unique ETF analyst consensus, determined based on a weighted average of its holdings' analyst ratings, SCHD is a Moderate Buy. The Street's average price target of $29.83 implies an upside of 10.41%. Currently, SCHD's five holdings with the highest upside potential are Kforce (KFRC), Halliburton (HAL), AMERISAFE, Inc. (AMSF), Interpublic Group of Companies (IPG), and Schlumberger (SLB). Meanwhile, its five holdings with the greatest downside potential are Cf Industries Holdings (CF), Moelis (MC), Buckle (BKE), Ford Motor (F), and Carter's (CRI). Revealingly, SCHD ETF's Smart Score is seven, implying that this ETF will likely perform in line with the market. Power up your ETF investing with TipRanks. Discover the Top Equity ETFs with High Upside Potential, carefully curated based on TipRanks' analysis.
