SCHD Vs. SCHG
I love investing in ETFs and will highlight two of the most popular ETFs. SCHD, the Schwab U.S. Dividend Equity ETF, has consistently outperformed the S&P 500, offering a solid dividend yield and growth, making it a great compliment to tech-heavy investments. SCHG, the Schwab U.S. Large-Cap Growth ETF, focuses on growth with heavy exposure to technology and communication services, offering a lower expense ratio compared to QQQ.
Want Decades of Passive Income? Buy This ETF and Hold It Forever
This extraordinary dividend ETF gives investors easy diversification and protection from the dreaded yield traps. It delivers a market-beating yield and double-digit dividend growth.
SCHD: Peeling Back The Many Layers Of This 3.80% Dividend Yielding ETF
SCHD has a 3.80% expected dividend yield, trades at 14.95x forward earnings, and is consistently one of the highest-quality large-cap value funds on the market. However, it's struggled lately as the earnings growth rates of its 99 holdings plummeted to -10.95% over the last year. For next year, analysts expect another 1% decline. As a result, dividend payout ratios suffer. SCHD is the only ETF in a ten-fund sample whose constituents have higher payout ratios than their four-year averages.
How $100 per Month Can Create $14,000 in Annual Dividend Income
Focusing on dividends could allow you to enjoy extra retirement income without having to sell any stocks. This ETF focuses on high-yield dividend payers with strong fundamentals.
SCHD: Turning This Dividend Growth ETF Favorite Into A Monthly Payer
SCHD is a dividend ETF that has been able to deliver some serious dividend growth with a CAGR of ~11% over 10 years. SCHD's value-oriented holdings helped it hold up better during the latest broader market volatility. This fund can help provide more diversification to a portfolio that may be leaning too heavily toward tech exposure.
SCHD: Still The Gold Standard Of Dividend ETFs
Dividend funds have struggled over the past five years as tech companies continue to dominate, leaving many dividend-paying companies behind. SCHD follows the Dow Jones U.S. Dividend 100 Index, focusing on high dividend-paying U.S. companies with strong fundamentals. SCHD's dividend growth rate has outperformed competitors, averaging 11% per year over the past decade, making it a top performer in the high dividend segment.
Schwab Rolls Out Ultra Short Fixed Income Fund
On Tuesday, Schwab Asset Management released its latest bond offering, the Schwab Ultra-Short Income ETF (SCUS). According to Schwab Asset Management, the release of SCUS marks their first actively managed fixed income ETF to head to markets.
SCHD: Preventing 'Diworsification' With Quality Dividends
The Schwab U.S. Dividend Equity ETF stayed quite resilient during the recent market selloff due to its focus on high-quality dividend companies, unlike the broader S&P 500. SCHD's holdings trade at a premium valuation, which, we believe, is justified by the stability and competitive advantage of the mature companies in the ETF. The current dividend yield of SCHD is nicely supported by the Free Cash Flow of its constituent companies, with potential for future growth in both dividends and share price.
SCHD: What If A Hard Landing Happens?
A hard landing is more likely now due to the recent rise in the unemployment rate. SCHD has historically demonstrated superior resilience and shorter recovery time compared to the broader market. I expect such superiority to repeat in the next downturn with even more potency given the alarming value-growth gap I'm currently seeing.
Market Volatility Builds The Case Why To Own SCHD
SCHD has faced negative commentary for lacking total returns, slow dividend growth, and relative poor performance compared to SPY and QQQ. Despite criticism, the Fund offers a defensive balance with quality holdings that better withstand market shocks and outperform during economic recessions. Schwab U.S. Dividend Equity ETF is a best-in-class, dividend-oriented ETF that provides a safe haven during turbulent times.
Playing Defense With SCHD
SCHD's net exposure vs the S&P 500 has turned more defensive after 2024's Portfolio Reconstitution. SCHD's relative underweight in technology and semiconductors is favorable in the current environment of heightened recession risks and waning enthusiasm for AI-themed plays. The ETF's relative overweight in banks is favorable, as this sector's growth prospects are attractive as credit quality concerns ease amid strong Q2 FY24 earnings.
SCHD: Easy Alpha
In our previous report, we explained how the Schwab US Dividend Equity ETF is built for winners. In this follow-up report, we explain how SCHD can easily add big alpha to investor returns (especially in volatile markets like we're seeing now). In the conclusion, we explain why many “SCHD haters” are usually barking up the wrong tree, as well as our strong opinion on who should invest.
