TXN - Forget SCHD: Buy Dividend Aristocrats Instead

2024-06-06 20:59:58 ET

Summary

• The Schwab U.S. Dividend Equity ETF has performed reasonably well over the years.
• However it has underperformed a similar strategy, which is buying a diversified portfolio of Dividend Aristocrat stocks.
• The Dividend Aristocrats have beaten the S&P 500 since their inception in 1990, SCHW has underperformed slightly.
• The Dividend Aristocrats have also beaten SCHW over the last 10 years.
• In this article I make the case that SCHW is uninteresting due to the availability of better alternatives.

The Schwab U.S. Dividend Equity ETF ( SCHD ) is a dividend investor favorite. Boasting an above-average yield and a miniscule 0.06% fee, it has a lot going for it. If you’d invested in SCHW 10 years ago you’d be only a little bit behind the S&P 500 on a total return basis, and have received much larger dividend payments. In a scenario where big tech stocks fall out of favor, SCHW shares may even outperform in the future....

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