The Schwab U.S. Dividend Equity ETF (SCHD) offers a higher dividend yield than the Vanguard High Dividend Yield ETF (VYM) with a similar low expense ratio. VYM has had stronger total returns, while SCHD focuses more on energy and consumer defensive stocks. SCHD has outperformed on dividend yield, while VYM has delivered better recent returns due to its holdings in technology. SCHD has a higher dividend yield of 3.5% compared to VYM’s 2.3%. Both ETFs are affordable with a 0.06% expense ratio. SCHD has a 14.3-year track record, while VYM has a larger AUM of $84.6 billion compared to SCHD’s $78.4 billion.

SCHD leans into energy and consumer defensive stocks, with top holdings in Lockheed Martin, Texas Instrument, and Chevron. VYM holds more diversified holdings, with top positions in Broadcom, JPMorgan Chase, and Exxon Mobil. SCHD has a higher dividend payout, while VYM has delivered stronger total returns over the past year. Both ETFs avoid leverage and currency hedges. SCHD is good for investors seeking a robust dividend yield, while VYM offers broader diversification and exposure to technology.

The Motley Fool Stock Advisor team did not include the Schwab U.S. Dividend Equity ETF in their list of 10 best stocks to buy now. The team’s total average return is 914%, outperforming the S&P 500. Investors looking for passive income through dividend payouts may consider SCHD for its higher yield, while VYM offers diversification and exposure to the technology sector.

Read more at Nasdaq: Better Dividend ETF: Schwab’s SCHD vs. Vanguard’s VYM