SCHD Is Up Nearly 30% and Its Yield Is Back Near 3% | Did Dividend Investors Miss the Easy Money?

SCHD's 30% rally has compressed its yield to 3.1%, and at $35 the entry point is far less attractive than the $27 that long-term holders paid in 2022 and 2023.

The 10-year Treasury's 4.7% yield outpaces SCHD's income with zero equity risk, making a split allocation smarter for fresh capital today.

Generating $3,000 monthly from SCHD now requires roughly $1.15 million invested, a significantly steeper capital requirement than just two years ago.

Dividend investors who held Schwab U.S. Dividend Equity ETF ( NYSEARCA:SCHD ) through the value-stock drought of the past two years now face a strange problem. SCHD has returned 29% year to date and trades near $35 per share, roughly 1.5% below its 52-week high. The rally has pulled SCHD's trailing distribution yield down to about 3.1%, close to the lowest level the fund has offered in years. A quality dividend index just delivered stock-like returns while becoming a less generous income source.

Anyone putting fresh money into SCHD is buying a different proposition than long-term holders locked in during 2022 and 2023, and the comparison against a 4.7% 10-year Treasury has grown harder to ignore.

SCHD tracks the Dow Jones U.S. Dividend 100 Index and screens for companies with consistent dividend payments, strong cash flow to debt, high return on equity, and reasonable yield. The result is a portfolio anchored by durable payers like Qualcomm ( NASDAQ:QCOM ), Texas Instruments ( NASDAQ:TXN ), UnitedHealth ( NYSE:UNH ), Coca-Cola ( NYSE:KO ), and Merck ( NYSE:MRK ). Its job is to deliver a rising income stream from quality large caps at a 0.06% expense ratio.

The return engine is dividends plus modest capital appreciation. SCHD avoids options overlays, leverage, and junk-rated payers, which is why its long-run performance has tracked earnings and dividend growth rather than multiple expansion. Over ten years, the fund has returned 242%, in line with the compounding investors expect from a disciplined dividend-growth basket.

If you've saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.

Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)