Dividend ETF SCHD has fallen 8%, presenting a buying opportunity for income-seekers

From Nasdaq: 2024-12-23 06:05:00

Dividend stocks have taken a hit due to the Federal Reserve’s decision to slow interest rate increases, causing higher yields. This presents a buying opportunity for income-seekers, with the Schwab U.S. Dividend Equity ETF (SCHD) falling significantly in recent trading. The ETF tracks the Dow Jones U.S. Dividend 100 Index, holding 100 top dividend stocks.

The Schwab U.S. Dividend ETF has lost about 8% of its value from its recent peak, making it an attractive entry point for investors seeking income. The fund’s top 10 holdings, which make up 40% of its assets, include companies like Cisco Systems, Blackrock, and Bristol Meyers Squibb, all with strong dividend yields and consecutive years of dividend increases.

With a diverse portfolio and a heavier weighting in financial stocks, the fund offers a 3.8% dividend yield based on its recent share price. Historically, the fund has delivered an average annual total return of 13.8% since its inception in 2011. Dividend growers like those in the fund have outperformed non-dividend-payers over the past 50 years.

The recent sell-off in dividend stocks presents an opportunity to invest in the Schwab U.S. Dividend Equity ETF, known for its strong returns and focus on companies with a history of increasing dividends. While this ETF wasn’t included in the latest 10 best stocks list, historical data shows the potential for significant returns over time. It’s a compelling income investment opportunity for investors seeking long-term growth.



Read more at Nasdaq: Got $500? This Top Dividend ETF Is a Great Buy After Its Recent Sell-Off.