Here's How Many Shares of SCHD You'd Need for $1,000 in Yearly Dividends
Key Points
The Charles Schwab U.S. Dividend Equity ETF's latest quarterly dividend was $0.2782.
Companies must meet financial criteria to be included in SCHD.
SCHD has averaged a 3.6% dividend yield over the past three years.
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There are plenty of exchange-traded funds (ETFs) that focus on dividends, but one of the better go-to options is the Charles Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). It holds 102 stocks and has been a staple for many investors since it hit the market in October 2011.
SCHD's last four per-share dividend payouts were $0.2782, $0.2604, $0.2602, and $0.2488. The payouts fluctuate because dividend companies pay their dividends at different times, but if the total $1.0476 per share payout over the past year were to remain constant, you would need to own 955 shares of SCHD to receive $1,000 annually. As of market closing on Dec. 11, Charles Schwab U.S. Dividend Equity ETF was priced at $27.68 per share, which means it would cost around $26,435 to accomplish this if you were starting from scratch.
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To be included in SCHD, a company must have 10 consecutive years of dividend increases and a healthy balance sheet. This ensures companies aren't included solely because they have a high dividend yield, helping to avoid yield traps. SCHD's top three holdings are Cisco (4.75% of the ETF), Merck & Co. (4.65%), and Amgen (4.45%).
This ETF's current dividend yield is 3.8%, more than three times the S&P 500 average. This dividend yield will inevitably fluctuate as Charles Schwab U.S. Dividend Equity ETF's stock price changes, but it's just above the 3.6% dividend yield that SCHD has averaged over the past three years. If you're looking for a dividend ETF that can be a staple in your portfolio, Charles Schwab U.S. Dividend Equity ETF is surely it.
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Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amgen, Cisco Systems, and Merck. The Motley Fool has a disclosure policy.
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