The Lowdown On The Schwab U.S. Dividend Equity ETF (SCHD)
Welcome to the ETF Daddy Power Rankings Review! Today, we delve into one of the most popular choices among dividend investors – the Schwab U.S. Dividend Equity ETF (SCHD). Known for its focus on high dividend yield and growth, SCHD stands out due to its unique fundamental and quality-driven approach. SCHD aims to track the performance of the Dow Jones U.S. Dividend 100 Index and includes 100 high dividend yielding U.S. stocks that have paid dividends for at least ten consecutive years and are screened for their financial health and dividend sustainability. SCHD is reconstituted annually in March, emphasizing quality and dividend growth. Let's explore how SCHD ranks based on our in-depth analysis and the factors that contribute to its success.
ETF Daddy Power Rankings
Based on our ranking system, SCHD holds a strong position overall, ranking 179th out of 935 funds. Here's a detailed look at SCHD's performance across various factors, with SPY included for comparison:
| Factor | Metric | SCHD Rank | SPY Rank |
|---|---|---|---|
| Size | $54,721 Million AUM | 18 | 1 |
| Expense Ratio | 0.06% | 54 | 107 |
| Liquidity | 2,989,270 Shares | 95 | 11 |
| Diversification | 57.43% of Assets in Top 10 Sub-Industries | 510 | 209 |
| Risk | 0.91 Beta | 105 | 365 |
| Growth Score | 2.96/10 | 933 | 339 |
| Value Score | 5.09/10 | 104 | 753 |
| Quality Score | 5.19/10 | 166 | 140 |
| Momentum Score | 3.69/10 | 800 | 190 |
| Sentiment Score | 5.74/10 | 761 | 217 |
Dividend Metrics
| Metric | SCHD | SPY |
|---|---|---|
| Dividend Yield (TTM) | 3.64% | 1.31% |
| Dividend CAGR (3Y) | 9.00% | 7.08% |
| Dividend CAGR (5Y) | 12.88% | 4.76% |
| Years of Consecutive Payments | 12 | 30 |
| Years of Consecutive Growth | 12 | 14 |
| Dividend Safety Score | 6.82/10 | 6.23/10 |
| Dividend Growth Score | 7.51/10 | 5.92/10 |
| Dividend Consistency Score | 8.16/10 | 7.03/10 |
| Dividend Yield Score | 7.09/10 | 5.67/10 |
Performance Table
| Time Period | SCHD Total Return | SPY Total Return |
|---|---|---|
| 1 Month | 0.02% | 3.53% |
| 3 Months | -2.53% | 4.38% |
| 6 Months | 4.02% | 15.23% |
| 1 Year | 11.17% | 24.50% |
| 2 Years | 16.84% | 48.70% |
| 3 Years | 14.31% | 32.92% |
| 4 Years | 72.76% | 87.29% |
| 5 Years | 74.63% | 101.10% |
| 6 Years | 93.72% | 121.52% |
| 7 Years | 117.61% | 153.16% |
| 8 Years | 143.87% | 198.17% |
| 9 Years | 172.10% | 210.07% |
| 10 Years | 179.90% | 232.52% |
Top Ten Holdings
Here are the top ten holdings for SCHD, including the stock name, sector, sub-industry, and weight:
| Stock Name | Sector | Sub-Industry | Weight |
|---|---|---|---|
| Home Depot, Inc. | Consumer Discretionary | Home Improvement Retail | 4.16% |
| AbbVie, Inc. | Health Care | Biotechnology | 4.13% |
| Cisco Systems, Inc. | Technology | Communications Equipment | 4.12% |
| Amgen, Inc. | Health Care | Biotechnology | 4.05% |
| Chevron Corp. | Energy | Integrated Oil & Gas | 4.02% |
| Lockheed Martin Corp. | Industrials | Aerospace & Defense | 4.00% |
| BlackRock, Inc. | Financials | Asset Management & Custody Banks | 3.98% |
| Verizon Communications, Inc. | Communication Services | Integrated Telecommunication Services | 3.98% |
| Coca-Cola Co. | Consumer Staples | Soft Drinks & Non-Alcoholic Beverages | 3.97% |
| United Parcel Service, Inc. B | Industrials | Air Freight & Logistics | 3.97% |
| Total | 40.38% |
Strengths
- Quality: SCHD excels in quality with a strong Quality Score of 5.19/10. Key quality metrics include a Gross Margin of 47.61%, an EBITDA Margin of 26.32%, and a Net Income Margin of 15.83%, reflecting the high financial health of its holdings.
- Expense Ratio: With an Expense Ratio of just 0.06%, SCHD is cost-effective, ensuring that investors retain more of their returns.
- Dividend Performance: SCHD offers a solid Dividend Yield (TTM) of 3.64%, with a 3-Year Dividend CAGR of 9.00% and a 5-Year Dividend CAGR of 12.88%. The ETF also boasts 12 consecutive years of dividend payments and growth, highlighting its commitment to providing consistent income to investors.
- Size and Stability: SCHD's substantial assets under management ($54,721 Million) and high average daily trading volume (2,989,270 Shares) reflect strong investor confidence and stability.
- Liquidity: SCHD’s Liquidity Rank (95th) indicates it is within the top 10% of all ETFs, making it highly liquid and favorable for investors.
Weaknesses
- Growth: SCHD's Growth Rank is low, positioned at 933rd overall. Notable growth metrics include a 5-Year Sales CAGR of 5.08%, an EPS CAGR (5Y) of 6.62%, and a Total Assets CAGR (3Y) of 4.95%. These figures suggest that while SCHD's holdings are stable and profitable, they may not offer significant growth potential compared to other options.
- Diversification: SCHD ranks 510th in diversification with 57.43% of assets in its top 10 sub-industries. While it focuses on high-quality dividend payers, this limited diversification may expose investors to sector-specific risks.
Conclusion
The Schwab U.S. Dividend Equity ETF (SCHD) is a top choice for investors seeking a blend of high dividend yield and quality. Its strong performance in size, expenses, quality, and liquidity underscores its reliability. However, investors should be aware of its lower growth potential and limited diversification. Overall, SCHD's focus on stable, high-yielding companies makes it a cornerstone for dividend-focused portfolios.
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