A Growing Favorite Among Dividend Investors
The Schwab U.S. Dividend Equity ETF (SCHD) has become a household name for income-focused investors. Built on a foundation of quality, consistency, and yield, SCHD has consistently attracted long-term holders looking to build wealth passively. As of early April 2025, the ETF trades at $25.28, reflecting a recent pullback that many investors are eyeing as a buy-the-dip opportunity.
The Power of Dividend Growth
In 2024, SCHD proved once again why it's a standout in the dividend space. The fund delivered a total annual dividend payout of $2.98 per share, representing a solid 12% increase from the previous year. This kind of growth is not just comforting—it’s the very reason many investors consider SCHD a "buy and forget" asset. Unlike riskier plays, SCHD offers steady, inflation-beating income with long-term reliability.
What's Inside SCHD?
The ETF’s portfolio consists of high-quality U.S. companies that meet strict profitability and dividend sustainability criteria. As of the last update, top holdings included corporate giants like BlackRock, Cisco Systems, and Home Depot. These companies bring more than just dividends—they bring decades of business resilience and shareholder value.
One of the most significant shifts in SCHD’s portfolio is its increased exposure to the energy sector. Moving from 12% to 21%, SCHD added names like ConocoPhillips and Halliburton. This pivot aims to boost dividend returns, but it also makes the ETF more sensitive to commodity price swings and global economic shifts.
SCHD vs. The Broader Market
Despite its strengths, SCHD underperformed the S&P 500 in 2024. While the S&P surged over 25%, SCHD gained a respectable 16.2%. This lag is partly due to its more conservative, value-oriented holdings, which don't typically soar during high-growth market cycles. However, for investors prioritizing stability over aggressive gains, this underperformance may not be a dealbreaker.
Technical analysis adds another layer of insight. Recent chart patterns, such as a rising wedge, suggest potential downward pressure in the short term. Investors should watch these signs carefully, especially if they plan to time their entry.
Is This the Dip You’ve Been Waiting For?
Market corrections often present golden opportunities, and many believe SCHD’s recent drop is one such moment. Given its consistent dividend growth, high-quality holdings, and increased income potential from energy stocks, SCHD remains one of the most attractive dividend ETFs on the market.
Still, no investment is without risk. The increased exposure to volatile sectors means returns could fluctuate more than in previous years. For some, this is a red flag. For others, it’s a reason to buy and hold for the long haul.
Final Thoughts: Buy the Dip, Then Relax
SCHD isn’t a get-rich-quick vehicle. It’s a solid, time-tested ETF designed for investors who value dependable income and long-term growth. If you’re looking to park your money somewhere that lets you sleep well at night, SCHD might just be the peace-of-mind investment you’ve been searching for.
So yes—buy the dip, and then rest easy. Let SCHD do the work.