The Best Dividend ETF to Buy in April 2026 If You Want Passive Income
The Motley Fool • • business
Key Points:
- The Schwab U.S. Dividend Equity ETF (SCHD) remains a reliable choice for investors seeking passive income through dividends, offering a natural hedge against market volatility.
- SCHD employs strict eligibility criteria for its holdings, including factors like five-year dividend growth, return on equity, cash flow to debt, and dividend yield, reducing the risk of unsustainable high yields.
- The ETF recently underwent reconstitution, removing 22 stocks such as AbbVie and Cisco Systems, while adding 25, including UnitedHealth Group and Procter & Gamble, leading to increased exposure in health care and tech sectors and decreased exposure in energy and materials.
- Despite energy being a top-performing sector early in the year due to geopolitical tensions, SCHD reduced its energy holdings to limit risk from potential market shifts.
- As of April 1, SCHD's dividend yield stood at approximately 3.5%, significantly higher than the S&P 500 average, underscoring its appeal for income-focused investors.
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