Why not to invest in SCHD?
At a high level, we know that SCHD trailed the S&P 500 (SPY) by a wide margin, but it also lagged the broad dividend stock index by 6% as well. Yes, dividend stocks as a whole underperformed the market, but SCHD did especially bad.
Overall, SCHD remains an attractive option for investors looking to balance income and growth in their portfolio. Its focus on quality large cap dividend payers, low expense ratio, and strong historical performance make it a solid choice for diversification and long-term investing.
But 2022-2023 was disappointing, and SCHD became a bottom-quartile performer. The primary reason was weak growth, and that might not change soon. Earnings revisions are relatively weak, and my evaluation across the ETF universe indicate analysts still favor growth stocks.
SCHD has a conensus rating of Moderate Buy which is based on 52 buy ratings, 45 hold ratings and 5 sell ratings. What is SCHD's price target? The average price target for SCHD is $84.12. This is based on 102 Wall Streets Analysts 12-month price targets, issued in the past 3 months.
The Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) and the Invesco S&P 500 High Dividend Low Volatility ETF (NYSEARCA:SPHD) are two popular dividend ETFs from leading asset managers. With a dividend yield of 4.5%, SPHD's yield is higher than SCHD's dividend yield of 3.5%.
Based on mean reversion, the macroeconomic backdrop, the relative overvaluation of risk assets or some combination of the three, I think 2024 is setting up to be a much better year for 2023's laggards. SCHD has a history of beating the averages and I think there's a good chance it can do so again.
SCHD's long-term track record of double-digit annualized returns over many years also inspires confidence that this is still a good place to be in the long term. Lastly, SCHD's expense ratio of just 0.06% is extremely favorable for investors, making this a compelling ETF to own in 2024 and beyond.
Schwab's dividend-growth ETF seems like a great long-term hold. You have the market-tracking characteristics, plus a growing dividend … and low expense ratio.
Because the Schwab U.S. Dividend Equity ETF has achieved double-digit annual returns in the long term, I see SCHD as a compelling buy-and-forget investment solution for long term oriented investors… especially those that are still concerned with post-inflation returns.
Over the past 10 years, SPY has outperformed SCHD with an annualized return of 12.77%, while SCHD has yielded a comparatively lower 11.61% annualized return. The chart below displays the growth of a $10,000 investment in both assets, with all prices adjusted for splits and dividends.
Should I buy SCHD or VYM?
high yield for the VYM), the Schwab U.S. Dividend Equity ETF may be a better bet for investors that seek to invest for the long term and reinvest their dividends. The longer-term (10-year) performance comparison shows that the SCHD outperformed the VYM quite significantly on both a price and total return basis…
Largest shareholders include Bank Of America Corp /de/, LPL Financial LLC, Charles Schwab Investment Advisory, Inc., Morgan Stanley, Ameriprise Financial Inc, Avantax Advisory Services, Inc., Northwestern Mutual Wealth Management Co, Envestnet Asset Management Inc, Wealthfront Advisers Llc, and Wealthspire Advisors, ...
USA . At this time, the etf appears to be fairly valued. Schwab US Dividend has a current Real Value of $78.56 per share. The regular price of the etf is $79.07.
FTEC is managed by Fidelity, while SCHD is managed by Schwab. Both FTEC and SCHD are considered high-volume assets.
SPHD and SCHD are both exchange-traded funds that focus on dividend stocks. However, there are a few key differences for investors to keep in mind. For example, SPHD focuses on low volatility stocks with high dividend yields, while SCHD focuses on stocks of companies with a track record of consistent dividend payments.
Schwab US Dividend Equity ETF™ Risk
It can help you understand the volatility of an ETF across all categories. Ratios above 1.00 indicate higher risk than average. Schwab US Dividend Equity ETF™ has a below average total risk index of 1.07 because of its standard deviation of 16.0%.
| Description | Average Annual Returns (%) | |
|---|---|---|
| 1 Year | 10 Year | |
| SCHD Market Price | +4.57 | +11.03 |
| SCHD NAV | +4.58 | +11.03 |
| Dow Jones U.S. Dividend 100 Index (Index) | +4.64 | +11.14 |
| Stock | Expected Change in Stock Price* |
|---|---|
| Tesla Inc. (TSLA) | 61% |
| Mastercard Inc. (MA) | 14.2% |
| Salesforce Inc. (CRM) | 7.2% |
| Advanced Micro Devices Inc. (AMD) | 11.3% |
SCHD Dividend Information
SCHD has a dividend yield of 3.37% and paid $2.67 per share in the past year. The dividend is paid every three months and the last ex-dividend date was Mar 20, 2024.
If you have a huge capital gain in SCHD in a taxable account you will have to analyze how a sale would affect your overall tax picture. At a minimum, you might consider not reinvesting dividends and investing those dividends and any new money you have to invest in safer fixed income.
What is the average return for SCHD?
In the last 10 Years, the Schwab US Dividend Equity ETF (SCHD) ETF obtained a 11.33% compound annual return, with a 14.47% standard deviation.
Schwab U.S. Dividend Equity ETF (SCHD) provides diversification to dividend-paying stocks with a quality tilt based on financial metrics. The fund tracks the Dow Jones U.S. Dividend 100 Index, which selects companies with a record of consistent dividend payments and strong fundamentals.
Nearly all leveraged ETFs come with a prominent warning in their prospectus: they are not designed for long-term holding. The combination of leverage, market volatility, and an unfavorable sequence of returns can lead to disastrous outcomes.
| Stock | Sector | Dividend Yield* |
|---|---|---|
| American Express Co. (AXP) | Financials | 1.1% |
| Johnson & Johnson (JNJ) | Health care | 3% |
| W.W. Grainger Inc. (GWW) | Industrials | 0.8% |
| Intel Corp. (INTC) | Information technology | 1.2% |
Schwab U.S. Dividend Equity ETF™ provides stable income and long-term capital appreciation, but may underperform in terms of growth. The SCHD ETF is invested in 104 diversified holdings across various sectors, with the top 5 holdings accounting for 22.4% of the portfolio.
