This Hugely Popular Dividend ETF Is About More Than Dividends

Motley Fool05-06

Dividend investors looking for a simple way to invest have a plethora of dividend-focused ETFs to choose from. One of the market's favorite dividend ETFs is Schwab U.S. Dividend Equity ETF. ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2433443805?lang=en_US&edition=fundamental","thumbnail":"https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F774920%2F22_01_24-a-stamp-with-dividends-on-it-_gettyimages-1249993252.jpg&op=resize&w=165&h=104","is_english":true,"pubTime":"2024-05-06 16:32","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2433443805","market":"us","top_or_hot":-1,"title":"This Hugely Popular Dividend ETF Is About More Than Dividends","media":"Motley Fool","content":"<div>\n<p>Dividend investors looking for a simple way to invest have a plethora of dividend-focused ETFs to choose from.\n\n\n\n\n\n\n\nOne of the market's favorite dividend ETFs is Schwab U.S. Dividend Equity ETF.\n\n\n\n...</p>\n\n<a href=\"https://www.fool.com/investing/2024/05/06/this-hugely-popular-dividend-etf-is-about-more-tha/\">Source Link</a>\n\n</div>\n","source":"fool_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>This Hugely Popular Dividend ETF Is About More Than Dividends</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThis Hugely Popular Dividend ETF Is About More Than Dividends\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-06 16:32 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2024/05/06/this-hugely-popular-dividend-etf-is-about-more-tha/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Dividend investors looking for a simple way to invest have a plethora of dividend-focused ETFs to choose from.\n\n\n\n\n\n\n\nOne of the market's favorite dividend ETFs is Schwab U.S. Dividend Equity ETF.\n\n\n\n...</p>\n\n<a href=\"https://www.fool.com/investing/2024/05/06/this-hugely-popular-dividend-etf-is-about-more-tha/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4581","symbol_name":"高盛持仓","start_time":0,"source_url":"https://www.fool.com/investing/2024/05/06/this-hugely-popular-dividend-etf-is-about-more-tha/","article_id":"2433443805","we_media_id":null,"thumbnails":["https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F774920%2F22_01_24-a-stamp-with-dividends-on-it-_gettyimages-1249993252.jpg&op=resize&w=165&h=104"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2433443805","pubTimestamp":1714984320,"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"Schwab U.S. Dividend Equity ETF is one of the largest dividend ETFs, but there's more going on with the portfolio than yield.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4581":"高盛持仓","BK4504":"桥水持仓","IVV":"标普500指数ETF","VOO":"Vanguard标普500ETF","SSO":"两倍做多标普500ETF",".SPX":"S&P 500 Index","BPOP":"大众银行","SDS":"两倍做空标普500ETF","OEX":"标普100","SH":"标普500反向ETF","BK4534":"瑞士信贷持仓","BK4585":"ETF&股票定投概念","BK4211":"区域性银行","OEF":"标普100指数ETF-iShares","SPXU":"三倍做空标普500ETF","BK4559":"巴菲特持仓","FDN":"First Trust Dow Jones Internet I","BK4588":"碎股","BK4550":"红杉资本持仓","UPRO":"三倍做多标普500ETF","SPY":"标普500ETF"},"translate_title":"这只非常受欢迎的股息ETF不仅仅是股息","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BPOP":1,"FDN":1,"US10Y.BOND":0.9,"US12M.BOND":0.9,"SPY":0.9,"US2Y.BOND":0.9,"US30Y.BOND":0.9,"US3Y.BOND":0.9,"US5Y.BOND":0.9,"US6M.BOND":0.9,"US7Y.BOND":0.9,"VOO":0.9,"US912797FH58.BOND":0.6,"US912797FS14.BOND":0.6,"US912797GB79.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6,"US912797HH31.BOND":0.6,"SSO":0.6,"ESmain":0.6,"UPRO":0.6,"IVV":0.6,"OEF":0.6,"OEX":0.6,"SDS":0.6,"SH":0.6,"SPXU":0.6,".SPX":0.6},"content_text":"Dividend investors looking for a simple way to invest have a plethora of dividend-focused ETFs to choose from.\n\n\n\n\n\n\n\nOne of the market's favorite dividend ETFs is Schwab U.S. Dividend Equity ETF.\n\n\n\n\n\n\n\nBefore you buy it, you should understand that yield is only one of the important factors in the ETF's stock selection process.\n\nVery often, dividend investors focus on dividend yield as a key selection metric. To some extent that makes sense, but it can miss important company-specific issues that might lead you to avoid a stock. That's exactly why dividend investors looking for an exchange-traded fund (ETF) need to examine Schwab U.S. Dividend Equity ETF (SCHD 0.91%). Here's what you need to know.All in on high yieldsStocks with high yields often have high yields for a reason. Either the sectors from which they hail are known for high yields, like utilities and real estate investment trusts (REITs), or the companies have temporarily fallen on hard times, which is normal in cyclical industries like energy or can be company-specific. The point is that buying stocks based solely on yield will often result in a portfolio that's concentrated in a small number of sectors and often will leave you with at least a few troubled stocks.Image source: Getty Images.This isn't inherently bad, since yield is the focus. And out-of-favor stocks often have a value flare to them, if you like buying stocks when they're cheap. There are a number of exchange-traded funds that you can choose from in this regard, like SPDR Portfolio S&P 500 High Dividend ETF (SPYD 0.60%). This ETF is composed of the 80 highest-yielding stocks in the S&P 500 Index.While the S&P 500 is itself made up of a hand-picked group of large, economically important companies, culling out the 80 highest yielders from the list is not exactly rocket science-level portfolio management. Real estate is the largest segment of the portfolio at 26% of assets, followed by financials at about 21% and utilities at 18% or so. Together these three sectors account for nearly two-thirds of the portfolio.SPDR Series Trust - SPDR Portfolio S&P 500 High Dividend ETF\" current_price=\"40.00\" daily_high=\"40.27\" daily_low=\"39.84\" default_period=\"FiveYear\" dividend_yield=\"N/A\" exchange=\"NYSEMKT\" fifty_two_week_high=\"40.79\" fifty_two_week_low=\"32.88\" gross_margin=\"0.00\" logo=\"https://g.foolcdn.com/art/companylogos/mark/SPYD.png\" market_cap=\"\" pe_ratio=\"\" percent_change=\"0.60\" symbol=\"SPYD\" volume=\"17\">Compared with what SPDR Portfolio S&P 500 High Dividend ETF is doing, Schwab U.S. Dividend Equity ETF takes dividend investing to the next level.Schwab U.S. Dividend Equity ETF is about yield and qualityFor starters, Schwab U.S. Dividend Equity ETF excludes REITs, pulling out stocks that would, by the nature of their corporate structure, tend to have among the highest yields. It also required stocks to have at least 10 years of annual dividend increases behind them, focusing both on consistent dividend payers and companies that provide shareholders with a growing income stream over time. There are also some liquidity and market cap rules, but those are basically fairly easy hurdles. To be honest, there's nothing all that special going on so far.What comes next is unique. Schwab creates a composite score based on a number of key variables that attempt to highlight company quality. Some of the key metrics in the composite score include cash flow to total debt, return on equity, the dividend yield, and the five-year dividend growth rate. The ETF then ranks stocks from best to worst on its composite score, selecting the top 100 names, weighted by market cap, for inclusion in Schwab U.S. Dividend Equity ETF.This approach mixes yield with quality and leads to a slightly different portfolio makeup. For starters, real estate is absent from the portfolio by design, but utilities are also a very small issue, at less than 1% of assets. The top sectors are financials, healthcare, consumer staples, industrials, energy, and consumer discretionary. While these sectors account for a bit over 80% of the total portfolio, the largest of them, financials, is only about 17% or so of the portfolio. That's smaller than the third largest sector in SPDR Portfolio S&P 500 High Dividend ETF.SPYD Total Return Price data by YChartsTo be fair, SPDR Portfolio S&P 500 High Dividend ETF offers a yield of 4.4% while Schwab U.S. Dividend Equity ETF's yield is lower at 3.3%. However, Schwab U.S. Dividend Equity ETF is more diversified, and the stocks it owns are likely to be of higher quality because of the screening techniques employed. For most dividend-focused investors trying to find a single ETF to buy, giving up a little yield here will probably make a great deal of sense. And as the preceding chart shows, total return results, which assumes dividend reinvestment, clearly favor Schwab U.S. Dividend Equity ETF's approach.All dividend ETFs are not created equallyThe big message here is that you can't judge a dividend ETF by its yield alone -- which is, of course, true of stocks, too. You need to dig in and understand how the portfolio is created. There are material drawbacks when it comes to ETFs that consider yield only when building a portfolio, while ETFs like Schwab U.S. Dividend Equity ETF tries to create a more compelling portfolio by combining yield with other fundamental data to pick good companies that also have high yields. That'll probably sound like a better long-term proposition for many investors.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2433443805"}