|
|
|
|
|||||
|
|
|
New: Instantly spot drawdowns, dips, insider moves, and breakout themes across Maps and Screener.
The Schwab U.S. Dividend Equity ETF holds 100 high-quality, high-yielding dividend stocks.
Its holdings have excellent records of increasing their dividends.
This ETF can help me achieve my passive income goal.
My top financial goal is to grow my passive income to the point where it can cover my basic living expenses. I've found that investing in exchange-traded funds (ETFs) can help me make progress toward that goal.
One of my favorite ETFs for generating passive income is the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). I plan to continue loading up on shares this February.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Image source: Getty Images.
The Schwab U.S. Dividend Equity ETF has a very simple strategy. It tracks the Dow Jones U.S. Dividend 100 Index, which aims to measure the performance of 100 high-quality, high-yielding dividend stocks. The fund screens companies based on several dividend quality characteristics, including yield and five-year dividend growth rate.
Over the last 12 months, the ETF's distribution yield has averaged 3.8%. That's more than three times higher than the S&P 500's dividend yield (1.1%). To put that into perspective, every $100 I invest in the fund would generate about $3.80 in annual dividend income, compared to only around $1.10 from a similar investment in an S&P 500 index fund.
The Schwab U.S. Dividend Equity ETF's current holdings have grown their dividends by an average of more than 8% per year over the past five years. That's much faster than the S&P 500's dividend growth rate of 5%.
This ETF can provide me with an attractive, steadily growing stream of passive dividend income. As a result, it should enable me to achieve my passive income target even sooner. On top of that, the earnings and dividend growth of the underlying companies steadily increase the ETF's share price. This income and growth combination has really added up over the years as the Schwab U.S. Dividend Equity ETF has delivered a 12.3% average annualized total return since its inception in 2011.
This compelling blend of income and growth is why I plan to continue loading up on this ETF in February.
Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $450,256!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,171,666!*
Now, it’s worth noting Stock Advisor’s total average return is 942% — a market-crushing outperformance compared to 196% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 1, 2026.
Matt DiLallo has positions in Schwab U.S. Dividend Equity ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
| 4 hours | |
| 6 hours | |
| Jan-31 | |
| Jan-29 | |
| Jan-29 | |
| Jan-28 | |
| Jan-25 | |
| Jan-24 | |
| Jan-24 | |
| Jan-24 | |
| Jan-23 | |
| Jan-23 | |
| Jan-23 | |
| Jan-22 | |
| Jan-21 |
Join thousands of traders who make more informed decisions with our premium features. Real-time quotes, advanced visualizations, backtesting, and much more.
Learn more about FINVIZ*Elite