Is SCHD Still the Best Dividend ETF You Can Buy for Passive Income? Here's What the Data Says.

Income investors don't have to research and select individual dividend stocks. They have plenty of good exchange-traded funds (ETFs) that pay dividends to choose from. And the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) has become the default pick for many income investors.

Is the Schwab U.S. Dividend Equity ETF still the best dividend ETF you can buy for passive income? Here's what the data says.

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Stacking up well against the top rivals

The Schwab U.S. Dividend Equity ETF handily beats its top rivals on one key front: dividend yield. The ETF's yield currently stands at 3.1%. That's well above the 2.2% yield for the Vanguard High Dividend Yield ETF (NYSEMKT: VYM). It's also higher than the iShares Core Dividend Growth ETF's (NYSEMKT: DGRO) yield of 1.9% and the Vanguard Dividend Appreciation ETF's (NYSEMKT: VIG) yield of 1.5%.

But what about dividend growth? The Schwab U.S. Dividend Equity ETF fares well in this category, too. The fund's dividend has increased by roughly 210% over the last five years. This level is significantly higher than the dividend growth for the iShares Core Dividend Growth ETF and both of Vanguard's top dividend ETFs during the period.

However, the Schwab U.S. Dividend Equity ETF doesn't quite come out on top in terms of cost. Its annual expense ratio of 0.06% is slightly higher than the 0.04% ratio for the two Vanguard dividend ETFs.

And there's also another important area where Schwab's fund isn't the biggest winner. The iShares Core Dividend Growth ETF generated a total return of 254% over the last 10 years, compared to around 244% for the Schwab U.S. Dividend Equity ETF.

The verdict

For investors whose primary focus is passive income, the data show that the Schwab U.S. Dividend Equity ETF remains the best option among widely followed dividend ETFs. Its annual expense ratio is also low, even though it's slightly higher than that one a top rival.

I wouldn't worry too much about the Schwab U.S. Dividend Equity ETF's underperformance in total return over the last 10 years, either. The fund's total return isn't much lower than that of the iShares Core Dividend Growth ETF over the period. More importantly, Schwab's fund has delivered the highest total return of its peer group by far over the last 12 months.

The Schwab U.S. Dividend Equity ETF is still what it has always been -- the dividend ETF that delivers attractive income with steady growth at a low cost. The data shows that it's still the best pick for income investors.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Dividend Appreciation ETF and Vanguard High Dividend Yield ETF. The Motley Fool has a disclosure policy.