SCHD ETF

SCHD has delivered a nearly 24% total return over the past year compared to its TTM dividend yield of 3.3%. Investors can benefit from potential capital appreciation, given the fundamentally strong companies in its holdings. SCHD focuses on mature, dividend-paying companies with strong economic moats and defensive sector allocations.

The Schwab US Dividend ETF (SCHD) stock price has done well this year and is hovering near its all-time high of $29.70. It has jumped by 16.5%, a notable performance for a fund that has no exposure to the fast-growing technology sector.

The Schwab U.S. Dividend Equity ETF is a solid choice for income and appreciation, despite recent underperformance. SCHD invests in 100 dividend-paying stocks from the Dow Jones U.S. Dividend 100 Index, focusing on fundamentally sound, reasonably priced businesses. While initial capital requirements to replace an income are high, the yield growth has been significant, lowering the barrier to entry.

SCHD remains a gold-standard dividend ETF, but has seen its growth prospects decline. Income growth potential dropped from 13%-14% to 8%-9%. SCHD's portfolio growth consensus has fallen 50% to 66% in the last few years, and its rules-based portfolio design will not likely improve. Combining the JPMorgan Equity Premium ETF and VictoryShares Free Cash Flow Yield ETF offers a superior alternative with a 4.6% yield and 13%- 14% income growth.

SCHD is a misunderstood ETF, and still excels in providing reliable dividend income and capital appreciation. SCHD's stock selection prioritizes companies with strong financial metrics, ensuring sustainable and growing dividends, despite recent underperformance due to unique market conditions. Comparing SCHD to VYM, SCHD shows superior long-term capital growth and risk-adjusted returns, though VYM had an exceptional year in 2024.

The Schwab US Dividend Equity ETF (SCHD) has done well this year and is hovering near its all-time high of $29.33. It has risen by 16.2% in 2024, underperforming the S&P 500 index, which has risen by over 25% this year.

ETFs can add stability and build wealth

Diversification is crucial for long-term wealth, and ETFs offer an easy way to achieve it, especially dividend-focused ETFs like SCHD, VIG, and VYM. SCHD is a versatile ETF with strong dividend growth, a 3.4% yield, and broad sector exposure, making it a great portfolio complement. VIG targets companies with consistent dividend growth, boasting a 1.7% yield and a 10% five-year dividend growth rate, heavily weighted in technology.

This fund could be the perfect investment for those wanting financial freedom through endlessly growing dividends.