Morningstar.com believes that the Schwab U.S. Dividend Equity ETF (NYSEARCA: SCHD ) is one of the better ETFs for dividend-focused investors. It stands to reason that if you're interested in dividend stocks to buy, SCHD is an excellent source of ideas.
In most cases, high dividend yields come with subpar capital appreciation and tepid dividend growth. But the highest-quality dividend payers don't force investors to accept such a steep compromise.
This ETF focuses on high-yield dividend payers with strong balance sheets. Most companies in the portfolio increase their dividends over time.
For investors considering adding more dividend strategies to their portfolios, now may be the time. Recently released data from Janus Henderson reports that U.S. dividend payments in 1Q24 achieved an all-time high.
The macro is currently not favorable for cyclical dividend assets such as SCHD. The U.S. economy's growth is decelerating due to restrictive monetary policy, geopolitical disruptions, and fiscal constraints. SCHD's top 10 holdings performed disappointingly in Q1, with negative operating earnings growth YoY, while the top 10 holdings in the S&P 500 reported booming profits.