Understanding SCHD: A High Dividend-Paying Stock Worth Considering
In the intricate world of investing, dividend stocks frequently stick out as a favorable choice, especially for people looking for to make passive income. Among the standout gamers 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 gotten a following among income-seeking financiers. This post aims to delve deep into SCHD, exploring its attributes, efficiency, and what prospective financiers should consider.
What Is SCHD?
SCHD is an exchange-traded fund (ETF) that seeks to track the efficiency of the Dow Jones U.S. Dividend 100 Index. The fund aims to supply direct exposure to high dividend-yielding stocks while also guaranteeing a step of quality. The underlying objective is not just to provide attractive yields but also to supply long-lasting capital appreciation.
Secret Features of SCHD:FeatureInformationFund ManagerCharles Schwab Investment ManagementInception DateOctober 20, 2011Expense Ratio0.06%Dividend YieldApproximately 4.0% (as of the recent quarter)Top Sector ExposuresInformation Technology, Consumer Discretionary, Health CareAverage Market CapMid to large-cap businessPerformance Insights
Investors frequently look at both historical performance and recent metrics when thinking about any financial investment. Below is a contrast of SCHD's performance against the wider market and its peer group over various timespan.
Performance TableTime PeriodSCHD Total ReturnS&P 500 Total ReturnComparison1 Year12.4%8.6%Schd High Dividend-Paying Stock outshined3 Years45.3%56.2%SCHD lagged slightly5 Years92.1%104.5%SCHD lagged a littleBecause Inception209.3%205.0%SCHD a little surpassed
These metrics show that SCHD has actually revealed considerable total returns, particularly since its inception. While it might not consistently exceed the S&P 500 over every time frame, its ability to yield dividends consistently makes it a deserving candidate for income-focused investors.
Top Holdings
A varied portfolio is essential for reducing danger while guaranteeing steady growth. The top holdings in SCHD help attain this by representing a variety of sectors. Below are the top 10 holdings since the newest 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