With shares of the popular dividend exchange-traded fund (ETF) Schwab US Dividend Equity ETF (SCHD 0.66%), investors are wondering whether it is time to dump the ETF or double up. In today's video, I will explain the pros and cons of the ETF and look at analyst expectations for the top 10 holdings, which include the likes of Pfizer (PFE -0.07%), Coca-Cola (KO -0.15%), and AbbVie (ABBV 0.99%).
I am bearish on Schwab U.S. Dividend Equity ETF for 2025 due to the ETF's poor positioning to capitalize on tech and AI growth drivers. SCHD's top 10 holdings posted a weak 3% revenue growth in 2024, compared to 24.1% for the S&P 500's top 10 holdings. Analyst consensus estimates suggest this performance gap will persist in 2025, with SCHD's top 10 holdings expected to grow revenues by only 5%.
The concept of market relativity is more alive than ever in today's economy, as gone are the days of individualistic price action in different asset classes and even stocks. With the advances in data delivery and technology, traders across the financial sector have found ways to connect the dots in pretty much all markets, and that is the one thing that these big hedge funds and investment bank traders get right.
Virtually every investor wants to build wealth, but there are countless roads to this destination. When discussing potential millionaire-making investments, it often boils down to how likely they are to get you where you want to go and how long it will take.
ETFs are a great way to build a solid foundation for any portfolio. Whether you are a growth investor or dividend investor, you want to have a solid base, and ETFs help with that.
SCHD's underlying index, the Dow Jones US Dividend 100, outperforms the S&P 500 in key metrics, making it a strong buy despite recent underperformance. SCHD's data excludes critical periods like the Tech Bubble and Great Recession, creating a base rate fallacy when comparing it to the S&P 500. Historical resilience during market downturns, including 2018, showcases SCHD's ability to generate profits and provide defense against volatility.
Exchange Traded Funds (ETF) predicated on tracking a particular index are normally passively managed and closely follow their benchmark.
Dividend stocks have gotten clobbered recently. The main catalyst is the Federal Reserve's recent decision to slow the pace of future interest rate increases.
Dividend investing at a time when the S&P 500 index is yielding a scant 1.2% is not easy. It is even more difficult if you are using exchange-traded funds (ETF) as your investment vehicle of choice.
Recent price corrections have pushed SCHD's yield to very attractive levels. But the attractiveness is dampened by a few other factors. SCHD's dividend growth has slowed, with the latest payout showing only a 6.9% annual growth rate, a far cry from previous double-digit rates.
SCHD's yield has become attractive relative to solid high yield picks. Current yield of 3.6% with ~11% income growth is a powerful mix. In this article, I share 3 key reasons how income-oriented investors could benefit from going long SCHD.
According to the daily charts, this exchange-traded fund with a high dividend yield of 3.67% has been under pressure as it has fallen below its short-term moving averages in the oversold territory.