Understanding SCHD: A High Dividend-Paying Stock Worth Considering
In the complicated world of investing, dividend stocks often stand apart as a beneficial choice, especially for individuals seeking to make passive income. Among the standout players in this domain is the Schwab U.S. Dividend Equity ETF (SCHD). This exchange-traded fund concentrates on high dividend-paying U.S. stocks and has actually acquired a following among income-seeking investors. This post intends to delve deep into SCHD, exploring its qualities, performance, and what prospective investors need to think about.
What Is SCHD?
SCHD is an exchange-traded fund (ETF) that looks for to track the performance of the Dow Jones U.S. Dividend 100 Index. The fund aims to supply direct exposure to high dividend-yielding stocks while likewise guaranteeing a measure of quality. The underlying goal is not just to use appealing yields however likewise to provide long-term capital appreciation.
Key Features of SCHD:FeatureDetailsFund ManagerCharles Schwab Investment ManagementInception DateOctober 20, 2011Cost Ratio0.06%Dividend YieldAround 4.0% (since the recent quarter)Top Sector ExposuresInformation Technology, Consumer Discretionary, Health CareTypical Market CapMid to large-cap businessEfficiency Insights
Investors often look at both historic efficiency and current metrics when considering any investment. Below is a comparison of SCHD's performance versus the broader market and its peer group over various amount of time.
Performance TableTime PeriodSCHD Total ReturnS&P 500 Total ReturnContrast1 Year12.4%8.6%SCHD surpassed3 Years45.3%56.2%SCHD lagged somewhat5 Years92.1%104.5%SCHD lagged somewhatConsidering that Inception209.3%205.0%SCHD a little exceeded
These metrics highlight that SCHD has revealed considerable total returns, especially since its inception. While it may not regularly surpass the S&P 500 over every time frame, its ability to yield dividends consistently makes it a worthwhile candidate for income-focused financiers.
Top Holdings
A varied portfolio is essential for minimizing threat while ensuring constant growth. The top holdings in SCHD aid accomplish this by representing a range of sectors. Below are the top 10 holdings as of the most current reporting.
Top 10 Holdings TableHoldingTickerWeight %Dividend Yield %Broadcom Inc.. AVGO 4.08 3.46Verizon CommunicationsVZ3.926.51Cisco Systems, Inc.. CSCO 3.82 3.14PepsiCo, Inc.. PEP 3.79 2.77Pfizer Inc.. PFE 3.68 4.86Coca-Cola CompanyKO3.653.09Abbott LaboratoriesABT3.621.69Home Depot, Inc.. HD3.60 2.79Texas Instruments Inc.. TXN 3.57 2.51Merck &amp