The Schwab U.S. Dividend Equity ETF (SCHD) continues to attract attention among income-focused investors, boasting a year-to-date gain of over 10%, significantly outperforming the S&P 500, which is down nearly 5%. With a trailing 12-month dividend yield of 3.3%, SCHD nearly triples the S&P 500’s yield of 1.2%, making it an appealing option for those seeking income. The ETF’s holdings trade at lower valuations—20 times earnings compared to the S&P 500’s 22.3—enhancing its attractiveness.
This ETF tracks the Dow Jones U.S. Dividend 100 Index, focusing on high-yield dividend stocks that have demonstrated strong financial health and consistent dividend growth. Over the past five years, SCHD’s holdings have increased dividends at an annualized rate exceeding 8%, outpacing the S&P 500’s 5% growth. This focus on dividend growth has contributed to SCHD’s impressive long-term performance, delivering over 11% annualized returns since its inception in 2011.
For market professionals, SCHD represents a compelling buy-and-hold strategy, combining robust income potential with strong total return prospects, making it a noteworthy addition to income-oriented portfolios.
Source: fool.com