Allocating $50K In A Dividend Portfolio: Enhancing SCHD With 10 High-Yield Picks

seekingalpha11-22

Despite its effective combination of dividend income and dividend growth, Schwab U.S. Dividend Equity ETF™ has some weaknesses, such as its reduced level of diversification, indicated by its limited ...

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/2485442941?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1226730172/image_1226730172.jpg","is_english":true,"pubTime":"2024-11-22 04:00","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2485442941","market":"us","top_or_hot":-1,"title":"Allocating $50K In A Dividend Portfolio: Enhancing SCHD With 10 High-Yield Picks","media":"seekingalpha","content":"<div>\n<p>Despite its effective combination of dividend income and dividend growth, Schwab U.S. Dividend Equity ETF™ has some weaknesses, such as its reduced level of diversification, indicated by its limited ...</p>\n\n<a href=\"https://seekingalpha.com/article/4739105-allocating-50k-in-a-dividend-portfolio-enhancing-schd-with-10-high-yield-picks\">Source Link</a>\n\n</div>\n","source":"seekingalpha","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>Allocating $50K In A Dividend Portfolio: Enhancing SCHD With 10 High-Yield Picks</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\">\nAllocating $50K In A Dividend Portfolio: Enhancing SCHD With 10 High-Yield Picks\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-22 04:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4739105-allocating-50k-in-a-dividend-portfolio-enhancing-schd-with-10-high-yield-picks><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Despite its effective combination of dividend income and dividend growth, Schwab U.S. Dividend Equity ETF™ has some weaknesses, such as its reduced level of diversification, indicated by its limited ...</p>\n\n<a href=\"https://seekingalpha.com/article/4739105-allocating-50k-in-a-dividend-portfolio-enhancing-schd-with-10-high-yield-picks\">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":"BK4588","symbol_name":"碎股","start_time":0,"source_url":"https://seekingalpha.com/article/4739105-allocating-50k-in-a-dividend-portfolio-enhancing-schd-with-10-high-yield-picks","article_id":"2485442941","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1226730172/image_1226730172.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2485442941","pubTimestamp":1732219200,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Despite its effective combination of dividend income and dividend growth, Schwab U.S. Dividend Equity ETF has some weaknesses, such as its reduced level of diversification, indicated by its limited ex","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4588":"碎股","SCHD":"Schwab US Dividend Equity ETF","BK4585":"ETF&股票定投概念"},"translate_title":"在股息投资组合中分配5万美元：通过10个高收益精选增强SCHD","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SCHD":0.9},"content_text":"Despite its effective combination of dividend income and dividend growth, Schwab U.S. Dividend Equity ETF™ has some weaknesses, such as its reduced level of diversification, indicated by its limited exposure to some sectors.I will address these weaknesses by demonstrating how to build a $50,000 dividend portfolio by enhancing SCHD with November’s top 10 high dividend yield companies.The Weighted Average Dividend Yield [FWD] of this dividend portfolio stands at 4.32%, and its 5-Year Weighted Average Dividend Growth Rate [CAGR] at 9.02%, mixing income and growth potential.This dividend portfolio is characterized by an increased capacity for the generation of dividend income and an elevated exposure to the Real Estate, Utilities, Materials, and Communication Services Sectors.   William_Potter  Investment Thesis The Schwab U.S. Dividend Equity ETF™ (NYSEARCA:SCHD) is a popular investment vehicle for investors aiming to combine dividend income and dividend growth. This is due to its effective integration for the generation of dividend income and its potential to increase this dividend to a significant amount annually. This is down to the sustainability of the companies’ dividends that are part of this ETF, in addition to their strong dividend growth potential. Today, Schwab U.S. Dividend Equity ETF’s Dividend Yield [TTM] stands at 3.38% and its 5-Year Dividend Growth Rate [CAGR] at 12.00%. However, the Schwab U.S. Dividend Equity ETF has some weaknesses, such as the fact that it is not invested in the Real Estate Sector and that the ETF exhibits a reduced allocation to the Utilities (0.03%), the Materials (1.54%), and the Communication Services Sector (4.34%). In today’s article, I will show you how to address these weaknesses and to elevate the ETF's ability to generate dividend income by enhancing this ETF with my top 10 high dividend yield companies I have selected for November 2024 in addition to five other companies that will further enhance the portfolio’s level of diversification. When compared to only investing in the Schwab U.S. Dividend Equity ETF, the dividend portfolio I am presenting in today’s article offers investors a superior Weighted Average Dividend Yield [FWD] of 4.32% compared to the 3.79% of the Schwab U.S. Dividend Equity ETF (assuming that the companies that are part of the Schwab US. Dividend Equity ETF increase dividends by 12% per year, which is in line with the ETF’s 5-Year Average Dividend Growth Rate [CAGR] of 12%). Furthermore, it offers investors an increased level of diversification. The portfolio’s increased level of diversification is evidenced by its higher exposure to the Real Estate Sector (9% compared to 0% when only investing in the Schwab U.S. Dividend Equity ETF), elevated exposure to the Utilities Sector (6.52% compared to 0.03%), higher allocation to the Materials Sector (5.85% compared to 1.54%), and increased exposure to the Communication Services Sector (6.39% compared to 4.34%). Overview of the Schwab U.S. Dividend Equity ETF Schwab U.S. Dividend Equity ETF’s Combination of Dividend Income and Dividend Growth With a current Dividend Yield [TTM] of 3.38% and a 5-Year Dividend Growth Rate [CAGR] of 12.00%, the Schwab U.S. Dividend Equity ETF is not just an adequate investment vehicle for those investors aiming to generate a significant amount of dividend income. It is also for those aiming to seek the potential for dividend growth. Additionally, it is particularly attractive for those who want to combine both dividend income and dividend growth. Schwab U.S. Dividend Equity ETF’s Current Level of Diversification As illustrated in the chart below, the Schwab U.S. Dividend Equity ETF has a large exposure to the Financials Sector, which presently represents 20.01% of this ETF. The second-largest sector is the Health Care Sector, which presently represents 15.16%. The third largest is the Consumer Staples Sector, which makes up 13.03%, followed by the Energy Sector (12.47%) and the Industrials Sector (11.70%). However, the weaknesses of this ETF include the fact that the Schwab U.S. Dividend Equity ETF has no exposure to the Real Estate Sector and reduced exposure to the Utilities (0.03%), the Materials (1.54%) and the Communication Services (4.34%) Sectors. Source: The Author, data from Seeking Alpha By enhancing the Schwab U.S. Dividend Equity ETF with November’s top 10 high dividend yield companies and five additional companies that balance dividend income and dividend growth, I aim to address the weaknesses of the Schwab U.S. Dividend Equity ETF, offering investors a higher degree of diversification and a reduced risk-level, which aims to elevate the likelihood for positive investment outcomes. In a previous article, I highlighted my top 10 high dividend yield companies for November 2024, given their relatively high Dividend Yield, the potential for dividend enhancements, financial strength, competitive position within their industry and their presently attractive Valuation:   NNN REIT, Inc. (NNN).   LyondellBasell Industries N.V. (LYB).   Ares Capital (ARCC).   Realty Income Corporation (O).   ING Groep N.V. (ING).   Verizon Communications Inc. (VZ).   Altria Group, Inc. (MO).   Pfizer Inc. (PFE).   Allianz SE (OTCPK:ALIZY).   Rio Tinto Group (RIO).   In the same article, I explained in greater detail the reasons I selected those companies, so I will not repeat that information here. In addition to the previously mentioned high dividend yield companies, I have added the following companies to this portfolio to strengthen its dividend growth potential and to enhance its level of diversification further:  Alphabet (NASDAQ:GOOG). Apple (NASDAQ:AAPL). Brookfield Renewable Partners (NYSE:BEP)(NYSE:BEPC). Eversource Energy (NYSE:ES). Microsoft (NASDAQ:MSFT).  Apple and Microsoft have been included in this dividend portfolio to enhance the portfolio’s exposure to the Technology Sector when compared to solely investing in the Schwab U.S. Dividend Equity ETF. Due to their portfolio inclusion, the exposure to the Technology Sector has increased from 10.86% (when only investing in the Schwab U.S. Dividend Equity ETF) to 12.98%. Furthermore, they have been included because of their potential to contribute to the portfolio’s dividend growth potential and their reduced risk level (which is — among other factors — a result of their strong brand image, diversified product portfolio and financial health), which helps us to decrease the portfolio’s overall risk-level and to increase the probabilities for reaching positive investment results. Alphabet has been included in the portfolio to enhance the portfolio’s exposure to the Communication Services Sector and to optimize the portfolio’s risk-reward profile, given Alphabet’s financial health, significant competitive advantages and its attractive Valuation (Alphabet presently has a P/E GAAP [FWD] Ratio of 22.54, which lies 12.60% below its 5-Year Average, suggesting that the company is presently undervalued). Alphabet’s portfolio inclusion has contributed to increasing the exposure to the Communication Services Sector from 4.34% to 6.39%. Brookfield Renewable Partners and Eversource Energy have been included in the portfolio to increase the portfolio’s allocation to the Utilities Sector when compared to only investing in the Schwab U.S. Dividend Equity ETF. They have also been included because of their ability to combine dividend income with dividend growth. Their portfolio incorporation has contributed to an increase in the exposure to the Utilities Sector from 0.03% (when only investing in the Schwab U.S. Dividend Equity ETF) to 6.52%. Overview of the Composition of the Strategically Enhanced SCHD Portfolio with November’s Top 10 High Dividend Yield Companies and 5 Additional Diversifiers   Symbol Name Sector Industry Country Dividend Yield [FWD] Dividend Growth 5 Yr [CAGR] P/E [TTM] Allocation Amount   SCHD Schwab U.S. Dividend Equity ETF ETF ETF United States 3.79% 12.00%   55.00% $ 27,500.00   RIO Rio Tinto Group Materials Diversified Metals and Mining United Kingdom 7.11% 5.62% 9.23 3.00% $ 1,500.00   ALIZY Allianz Financials Multi-line Insurance Germany 4.69% 8.02% 12.2 4.00% $ 2,000.00   MO Altria Consumer Staples Tobacco United States 7.49% 4.10% 9.32 2.00% $ 1,000.00   LYB LyondellBasell Industries N.V. Materials Commodity Chemicals United States 6.41% 4.79% 12.74 2.00% $ 1,000.00   ING ING Groep Financials Diversified Banks Netherlands 7.61% 8.75% 7.76 2.00% $ 1,000.00   NNN NNN REIT Real Estate Retail REITs United States 5.45% 2.44% 12.71 4.00% $ 2,000.00   O Realty Income Real Estate Retail REITs United States 5.55% 3.55% 14.33 5.00% $ 2,500.00   PFE Pfizer Health Care Pharmaceuticals United States 6.41% 4.25% 10.15 1.50% $ 750.00   ARCC Ares Capital Financials Asset Management and Custody Banks United States 8.92% 3.84% 8.3 4.00% $ 2,000.00   VZ Verizon Communication Services Integrated Telecommunication Services United States 6.71% 1.98% 8.84 1.00% $ 500.00   AAPL Apple Information Technology Technology Hardware, Storage and Peripherals United States 0.45% 5.43% 30.31 4.00% $ 2,000.00   GOOG Alphabet Communication Services Interactive Media and Services United States 0.44%   24.04 3.00% $ 1,500.00   MSFT Microsoft Information Technology Systems Software United States 0.78% 10.27% 35.32 3.00% $ 1,500.00   BEP Brookfield Renewable Partners Utilities Renewable Electricity United States 5.61% 11.60% 26.06 3.00% $ 1,500.00   ES Eversource Energy Utilities Electric Utilities United States 4.72% 5.97% 23.14 3.50% $ 1,750.00             4.32% 9.04%   100.00% $ 50,000.00    Click to enlarge Source: The Author, data from Seeking Alpha. I have considered the following factors when determining the allocation for each company:   The risk-reward profile of the company The company’s current Valuation The sustainability of the company’s dividend The company’s ability to blend dividend income with dividend growth The financial health of the company The company’s competitive advantages The company’s growth outlook The company’s competitive position within its industry.  Each of the selected companies for this dividend portfolio has an allocation that is within the allocation limit I mentioned in my previous article on November’s top 10 high dividend yield companies. Through the careful selection process of this dividend portfolio, I aim to meet the following portfolio requirements to reduce the risk level for investors when compared to solely investing in the Schwab U.S. Dividend Equity ETF:  No company accounts for more than 5% of the overall portfolio, even when allocating SCHD across the companies it is invested in.  Only companies that are particularly attractive in terms of risk and reward can account for more than 3% of the overall portfolio, ensuring a reduced company-specific concentration risk.  Companies with a higher risk level account for less than 3% of the overall portfolio.  The proportion of the real estate, materials, and utilities sectors should be increased compared to only investing in SCHD, ensuring a broader sector diversification.  Inclusion of companies from outside the United States to increase geographical diversification while maintaining the portfolio’s main focus on U.S. companies.  Risk Analysis of the Strategically Enhanced SCHD Portfolio with November’s Top 10 High Dividend Yield Companies Risk Analysis of the Portfolio Allocation per Company/ETF Accounting for 55% of the overall portfolio, the Schwab U.S. Dividend Equity ETF represents the largest position of this dividend portfolio, allowing us to allocate a relatively small amount to each of the selected individual companies. This strategic allocation approach allows us to ensure that no individual company represents more than 5% of the overall portfolio, thereby ensuring a reduced portfolio’s company-specific concentration risk. The largest individual positions of the portfolio are Realty Income (5%), Allianz (4%), Apple (4%), NNN REIT (4%), and Ares Capital (4%). I believe that each of these companies stands out through its attractive risk-reward profile, which is the reason I have allocated an elevated portfolio proportion to each of these companies. Source: The Author Risk Analysis of the Portfolio’s Company-Specific Concentration Risk When Distributing SCHD Across its Companies  The chart below illustrates the company allocation of this dividend portfolio when distributing the Schwab U.S. Dividend Equity ETF across the respective companies in which it is invested. This is important to ensure the reduced company-specific concentration risk of the portfolio. It should be noted that Realty Income (with a proportion of 5% on the overall portfolio), NNN REIT (4%), Ares Capital (4%), Apple (4%) and Allianz (4%) make up the largest proportion of this dividend portfolio when distributing the Schwab U.S. Dividend Equity ETF across its respective companies. Each of these companies can be characterized by their robust financial health, strong competitive position within their respective industry and reduced overall risk level. Therefore, each of them effectively contributes to the portfolio’s optimized risk-reward profile. This positions the dividend portfolio to perform well in different market conditions. Altria (with a proportion of 3.93%), Pfizer (3.51%), Eversource Energy (3.50%) and Verizon (3.06%) represent more than 3% of the overall portfolio. Rio Tinto Group, Microsoft, Brookfield Renewable Partners and Alphabet each account for 3% of the overall portfolio. All other companies represent less than 2.5% of the overall portfolio. Therefore, these have a reduced impact on the portfolio’s Total Return. It is worth noting that the chart below demonstrates all portfolio positions that hold at least 2% of the overall portfolio. Source: The Author, data from Seeking Alpha and Morningstar It is further worth highlighting that I have allocated a reduced proportion to the individual positions of Altria (2% direct investment in the company), Pfizer (1.5%) and Verizon (1%), given the fact that the Schwab U.S. Dividend Equity ETF is already invested in those companies. This allocation strategy ensures that none of these companies represents more than 4% of the overall portfolio even when distributing the Schwab U.S. Dividend Equity ETF across the respective companies it is invested in, ensuring a reduced risk level for investors. Risk Analysis of the Portfolio’s Sector-Specific Concentration Risk When Distributing SCHD Across its Sectors  The reduced risk level of this dividend portfolio, when compared to solely investing in the Schwab U.S. Dividend Equity ETF, is reflected in the portfolio’s broader sector diversification. While only investing in the Schwab U.S. Dividend Equity ETF would mean no exposure to the Real Estate Sector, this dividend portfolio offers investors an allocation of 9% to the Real Estate Sector due to its exposure to Realty Income (5%) and NNN REIT (4%). Additionally, it can be highlighted that solely investing in the Schwab U.S. Dividend Equity ETF would imply a limited exposure to the Utilities Sector of only 0.03%. This dividend portfolio offers investors increased sector diversification, given its 6.52% allocation to the Utilities Sector. The portfolio further offers investors an enhanced exposure to the Materials Sector (5.83%) compared to only investing in the Schwab U.S. Dividend Equity ETF (which only holds an allocation of 1.54% in the Materials Sector). Additionally, it should be noted that the portfolio has an increased allocation to the Communication Services Sector, representing 6.39% of the overall portfolio compared to 4.34% when solely investing in the Schwab U.S. Dividend Equity ETF. Source: The Author, data from Seeking Alpha and Morningstar The above chart underscores my theory that this dividend portfolio offers investors a significantly higher degree of diversification. Therefore, it provides a reduced risk level when compared to only investing in the Schwab U.S. Dividend Equity ETF. Risk Analysis of the 15 Individual Positions of the Strategically Enhanced SCHD Portfolio with November’s Top 10 High Dividend Yield Companies and 5 Additional Diversifiers The Dividend Yields [FWD] The portfolio’s ability to generate dividend income is underscored by the fact that many of the companies pay an attractive amount of dividends. 10 of the 15 individual companies that are part of this dividend portfolio pay a Dividend Yield [FWD] of above 5%. Those companies that contribute most to the generation of dividend income are Ares Capital (Dividend Yield [FWD] of 8.92%), ING Groep (7.61%), Altria (7.49%), Rio Tinto Group (7.11%), Verizon (6.71%), LyondellBasell Industries (6.41%), Pfizer (6.41%), Brookfield Renewable Partners (5.61%), Realty Income (5.55%), and NNN REIT (5.45%). Source: The Author, data from Seeking Alpha  The 5-Year Dividend Growth Rates [CAGR]  The portfolio presented in today’s article consists of companies that pay an attractive dividend income and also those that provide strong dividend growth potential. The companies with the highest 5-Year Dividend Growth Rate [CAGR] that are part of this dividend portfolio are Brookfield Renewable Partners (5-Year Dividend Growth Rate [CAGR] of 11.60%), Microsoft (10.27%), ING Groep (8.75%), Allianz (8.02%), Eversource Energy (5.97%), Rio Tinto Group (5.62%) and Apple (5.43%), underlining the portfolio’s strong potential for dividend growth in addition to its ability to generate dividend income. Source: The Author, data from Seeking Alpha Analysis of the Companies’ Growth Outlooks The 5-Year Revenue Growth Rates [CAGR] The positive growth outlook of the companies that are part of this portfolio is reflected in the elevated 5-Year Revenue Growth Rates [CAGR] of the companies that are part of the portfolio. 13 of the 15 individual positions of this portfolio have shown positive 5-Year Revenue Growth Rates [CAGR]. Nine companies have shown 5-Year Revenue Growth Rates [CAGR] above 5%. Realty Income (with a 5-Year Revenue Growth Rate [CAGR] of 28.40%), Alphabet (16.99%), Ares Capital (14.59%) and Microsoft (14.38%) have even shown double-digit 5-Year Revenue Growth Rates [CAGR]. Source: The Author, data from Seeking Alpha Analysis of the Companies’ Financial Health The Net Income Margins [TTM] The portfolio’s prioritization of financially healthy companies is underlined by the fact that 13 of the 15 individually selected companies exhibit Net Income Margins [TTM] above 5%. Nine of the 15 companies even have double-digit Net Income Margins [TTM]. The companies with the highest Net Income Margins that are part of this portfolio are Ares Capital (53.71%), Altria (50.51%), NNN REIT (45.63%), Microsoft (35.61%), Alphabet (27.74%), Apple (23.97%), and ING Groep (21.21%), reflecting the portfolio’s focus on financially robust companies, which suggests a reduced level of risk of this dividend portfolio. Source: The Author, data from Seeking Alpha Geographical Diversification The largest proportion of this dividend portfolio is allocated to companies in the United States, representing 91% of the portfolio. 4% of the portfolio is allocated to a company from Germany (Allianz), 3% to a company from the United Kingdom (Rio Tinto Group), and 2% to a company from the Netherlands (ING Groep), suggesting a degree of geographical diversification while indicating a strong focus on companies with attractive risk-reward profiles within the United States. Source: The Author, data from Seeking Alpha This geographical portfolio allocation further underlines the portfolio’s reduced risk level, which implies elevated chances of positive investment outcomes. Conclusion In this article, I have demonstrated how to enhance the Schwab U.S. Dividend Equity ETF with the 10 top high dividend yield companies I selected for November 2024, in addition to five companies that integrate the generation of dividend income with the potential for dividend growth and that help to further diversify the portfolio compared to only investing in the Schwab U.S. Dividend Equity ETF. This dividend portfolio’s careful selection process provides a significantly higher proportion to the Real Estate Sector (9% exposure to the Real Estate Sector, while the Schwab U.S. Dividend Equity ETF is not invested in the Real Estate Sector at all). With a proportion of 6.52%, the portfolio also provides investors with a significantly higher allocation to the Utilities Sector compared to the 0.03% when only investing in the Schwab U.S. Dividend Equity ETF. With a 5.85% distribution to the Materials Sector, the portfolio also has a higher allocation to the Materials Sector when compared to the 1.54% when investing in the Schwab U.S. Dividend Equity ETF alone. It further has a higher allocation to the Communication Services Sector (6.39% compared to Schwab U.S. Dividend Equity ETF’s 4.34%). Those higher allocations to sectors that are underrepresented within the SCHD are important indicators of the portfolio’s reduced risk level in comparison to solely investing in the Schwab U.S. Dividend Equity ETF. The portfolio presented in this article offers investors a Weighted Average Dividend Yield [FWD] of 4.32%, which is superior to the Dividend Yield of the Schwab U.S. Dividend Equity ETF. Additionally, the portfolio exhibits an attractive 5-Year Weighted Average Dividend Growth Rate [CAGR] of 9.02%, indicating the effective integration of the generation of dividend income with the potential for dividend growth. By implementing such an investment portfolio, you can not only reduce the risk level of your portfolio compared to solely investing in the Schwab U.S. Dividend Equity ETF; you can also elevate the portfolio’s chances for positive investment outcomes while receiving a dividend income that is superior to the one you would receive by solely investing in the Schwab U.S. Dividend Equity ETF. Author’s Note: Are you following a similar investment strategy that mixes dividend income and dividend growth? Which ETFs and individual companies are part of your investment portfolio?  Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":2,"commentSize":0,"repostSize":0,"favoriteSize":2,"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":"4.29.3","shortVersion":"4.29.3","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/2485442941"}