Saturday analysis is coming. Let’s wrap up Part 2 of the article where we left off.
I'm going to talk about the SCHD fund, which updates itself every quarter according to changing dynamics. I’ll also add a little "cream on top." Yes, SCHD pays dividends. It's efficient in the long run—an ETF you can sleep on peacefully.
This ETF focuses on stocks with high dividend yields. Its growth potential is limited, which also means it carries less risk.
Its full name is Schwab U.S. Dividend Equity ETF (SCHD).
✅️ It includes stocks from sectors like Energy, Consumer Goods, and Healthcare (mostly pharmaceuticals), which make up about 70% of its portfolio.
✅️ Over the past 5 years, it has increased its dividend income by an average of 10% annually.
In 2020, the fund was priced around $60. Last year, it underwent a 3-for-1 stock split. That means if you had 1 share, you now have 3.
Currently, it trades around $25.
✅️ The dividend yield is 5%, which I think is an excellent number for the U.S. stock market.
✅️ The dividend schedule occurs quarterly, 4 times a year. The first payment was made on March 31, paying $0.25 per share.
Now, for those who say:
“I want both dividend income and strong growth potential with higher risk,”
then let me introduce you to the #SPY fund.
SPY includes companies in the S&P 500 like Amazon, Apple, Microsoft.
Its dividend yield isn’t as high as SCHD—around 2%.
However, its standout feature is its focus on technology-driven companies, which is a major factor in its growth rate.
Yes, NVDA is also in this ETF.
SPY is trading around $534. Back in 2020, it was at $350.
So in 5 years, it has grown by 50% in USD terms, plus it paid dividends. ✅️
Now let’s talk about the main difference between SCHD and SPY:
SCHD holds around 100 stocks, selected based on dividend criteria.
SPY, on the other hand, holds around 500 stocks.
All my analyses are original content. Copying is prohibited.
This is not financial advice and involves risk.
Sparrow