NYSEARCA:SCHD ETF Forecast: Dividend Growth Strength at $27.84 With 3.87% Yield

NYSEARCA:SCHD ETF Performance Anchored in Dividend Growth

The Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) closed at $27.84 on September 2, slipping 0.29% during regular trading before edging slightly higher to $27.83 in after-hours. With assets under management at $69.04 billion and a net expense ratio of just 0.06%, SCHD has become a pillar in dividend-focused portfolios, offering investors stability alongside consistent income. Its current yield stands at 3.87%, supported by a year-to-date total return of 4.13%, despite underperforming the Large Value category average of 6.00%. Over the last decade, SCHD’s annualized return of 11.10% continues to stand above category peers, underscoring its resilience and disciplined stock selection methodology.

Dividend Consistency and Yield Expansion for NYSEARCA:SCHD

One of the defining features of SCHD is its dividend policy. The fund demands at least a 10-year dividend payment history from its constituents, ensuring that only durable income-producing companies make the cut. Its five-year dividend growth rate of 10.87% implies that investors’ yield on cost doubles roughly every seven years. Those who bought at inception now enjoy a yield on cost exceeding 12%, a record very few ETFs can match. Unlike yield-chasing ETFs with leveraged overlays, SCHD delivers clean dividend income derived from cash flows. Even at today’s yield of 3.87%, the forward compounding dynamic positions it as a cornerstone for retirement-focused strategies.

Sector Weightings and Holdings Concentration in NYSEARCA:SCHD

SCHD’s portfolio reveals a deliberate tilt toward value sectors that contrast sharply with growth-heavy indices. Energy carries the heaviest weight at 19.89%, led by Chevron (CVX) at 4.34% and ConocoPhillips (COP) at 4.37%. Consumer defensive stocks account for 19.16%, healthcare 15.84%, and technology exposure is limited to 10.35%. This defensive positioning shields investors from volatile growth shocks, while top holdings like PepsiCo (PEP) at 4.21%, Cisco Systems (CSCO) at 4.12%, Amgen (AMGN) at 4.08%, and Merck (MRK) at 4.05% provide both stability and dividend dependability. No single company exceeds the 4% weighting cap, diversifying risk and avoiding concentration pitfalls.

Comparative Strength of NYSEARCA:SCHD Versus Peers

When stacked against rivals such as Vanguard High Dividend Yield ETF (VYM) and iShares Core High Dividend ETF (HDV), SCHD demonstrates superior dividend growth metrics. While VYM’s expense ratio is slightly lower at 0.04%, SCHD’s mix of yield and long-term compounding growth offsets the cost difference. In terms of volatility, SCHD’s five-year beta of 0.78 makes it less sensitive to market swings than broader benchmarks like the Vanguard S&P 500 ETF (VOO). This combination of high-quality dividends and defensive stability positions SCHD as a balanced tool for investors navigating market uncertainty, particularly in a climate where tech valuations remain stretched.

Performance History and Market Context for NYSEARCA:SCHD

Over the last three years, SCHD delivered 8.92% annually, trailing the Large Value category’s 10.77%, but over ten years, SCHD outpaced with 11.10% annualized returns versus the category’s 9.34%. In 2024, it posted an 11.67% total return, following modest gains of 4.57% in 2023 and a small 3.23% decline in 2022 during broader market stress. SCHD’s strength shone in 2021 with a 29.87% gain and in 2019 with a 27.28% surge, proving its capacity to capture upside in bull markets. The ETF’s trailing 12-month P/E ratio of 17.66 suggests it remains attractively valued relative to its underlying earnings base, especially against the backdrop of stretched growth multiples.

Risks in NYSEARCA:SCHD from Energy Dependence

Energy dominance in the portfolio represents both opportunity and risk. Oil majors like Chevron and ConocoPhillips generate strong cash flows in times of elevated crude prices, but sharp declines in WTI or Brent could impair dividends and drag fund performance. Investors should also weigh the cyclicality of industrials, which carry nearly 10% of SCHD’s exposure, as global trade tensions and slowing manufacturing add uncertainty. While SCHD’s dividend quality remains unmatched, its share-price performance can occasionally lag broader indices, especially in tech-led rallies such as 2023–2024.

Investment Case for NYSEARCA:SCHD

At $27.84, SCHD trades near the middle of its 52-week range of $23.87 to $29.72. The ETF currently offers a forward annual dividend of $1.60 per share, yielding 3.87%, with the next ex-dividend date already locked for August 29, 2025. For investors prioritizing income stability and growth, SCHD remains one of the strongest large-value ETFs available. With consistent dividend hikes, a robust portfolio of defensive leaders, and a record of outperformance across market cycles, SCHD continues to offer long-term value. Its balance between yield, growth, and lower volatility sets it apart, even if near-term returns lag growth-heavy benchmarks.

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