From Yahoo Finance: 2025-05-11 11:47:00

Investing in an S&P 500 index fund yields just 1.3%, but the Schwab U.S. Dividend Equity ETF offers a 3.7% yield, nearly three times higher. The ETF selects companies with strong financials and increasing dividends over 10 years, providing a diverse approach to dividend investing. With a low expense ratio of 0.06%, it’s a solid choice for investors seeking attractive dividend stocks.

The Schwab U.S. Dividend Equity ETF uses a composite score based on cash flow, return on equity, dividend yield, and five-year dividend growth rate to select the top 100 companies for its portfolio. This market-cap weighted approach ensures performance while maintaining a focus on financial strength and dividend growth. Investors benefit from both yield and capital growth, making it an appealing option for dividend investors looking for simplicity and consistent returns.

The ETF’s income stream has shown growth over time, aligning with its capital appreciation. By rebalancing annually, the fund consistently adds companies with higher yields to drive the dividend higher. While the ETF may not cater to individual preferences, its proven track record of yield and growth makes it a top choice for investors seeking attractive dividend stocks.

The Motley Fool Stock Advisor identified the top 10 stocks for investors to buy now, but the Schwab U.S. Dividend Equity ETF wasn’t included. With historical returns significantly outperforming the S&P 500, investors are encouraged to explore the top 10 list for potential monster returns. Don’t miss the opportunity to join Stock Advisor for access to the latest recommendations and market-crushing performance.

Read more: The Best Dividend ETF to Invest $1,000 in Right Now