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SCHD Is Brilliant. Here's Why I Think This Dividend ETF Is Even Better.
The Motley Fool • • business
Key Points:
- The Schwab U.S. Dividend Equity ETF (SCHD) focuses on high-quality, high-yield dividend stocks, offering a 3% dividend yield and steady dividend growth, with top sectors including healthcare, consumer staples, and energy.
- SCHD's top holdings include established Dividend Kings like Coca-Cola, Procter & Gamble, and PepsiCo, contributing significantly to its total return through dividend income.
- The First Trust Rising Dividend Achievers ETF (RDVY) targets Nasdaq-listed companies with rising dividends and strong financials, emphasizing growth sectors such as financials, technology, and industrials.
- RDVY has delivered a higher average annual total return of 15.8% over the past decade compared to SCHD's 13.2%, although it offers a lower dividend yield around 0.8% due to its focus on faster-growing companies.
- Investors seeking higher income may prefer SCHD for its higher yields, while those aiming for faster wealth growth might favor RDVY for its stronger total return performance despite lower dividends.
