Building A SCHD Inspired Dividend Income Screener For May

2025-05-15 12:37:33 ET

Summary

• The goal of this article is to create a screen that the everyday investor could use to hunt for stocks similar to the Dow Dividend 100 constituents.
• I create a system where I attempt to screen for the top 10 stocks that rate the highest according to an SCHD replication strategy.
• A factor-based system is used to rank the stocks.
• I also check my hit rate against the 100 stocks in the SCHD portfolio to see if my screen is accurate, attempting to get a hit rate of at least 50%.

Cloning a popular system

Most of us on Seeking Alpha know by now that the Schwab U.S. Dividend Equity ETF ( SCHD ) is one of, if not the most popular dividend funds in existence. For myself personally, it has become my third-largest core holding in my "core satellite" strategy anchored by index funds. Again, this fund is not so much about alpha, it's about preservation of capital and consistent dividend CAGR over time. I would argue that when looking under the microscope at a multitude of dividends and income-centric funds, SCHD has the smoothest line in dividend CAGR of the bunch, averaging about 11% per annum....

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