Here's How Many Shares of the Schwab U.S. Dividend Equity ETF (SCHD) You'd Need for $500 in Yearly Dividends
Key Points
The Schwab U.S. Dividend Equity ETF holds 100 high-quality dividend stocks.
It holds stocks based on several dividend quality characteristics, including yield and dividend growth rate.
The fund pays a high-yielding and steadily rising dividend.
- 10 stocks we like better than Schwab U.S. Dividend Equity ETF ›
The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is one of the largest dividend-focused exchange-traded funds (ETFs). It has become a magnet for income-focused investors, in part due to its attractive dividend yield.
Here's a look at how many shares of this top ETF you'd need to buy to collect $500 of dividend income each year.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: Getty Images.
A top dividend ETF
The Schwab U.S. Dividend Equity ETF tracks an index that screens for the best dividend stocks based on several dividend quality characteristics, including dividend yield and the five-year dividend growth rate. The fund holds 100 companies that pay high-yielding and steadily rising dividends.
The ETF collects dividend payments from its holdings and distributes the income to investors on a quarterly basis. It has paid out a cumulative $1.03 per share in dividends over the past 12 months, giving it a 3.8% annualized distribution yield at the current share price.
At that rate, you would need to own roughly 485 shares to generate $500 of annual dividend income. Those shares would cost you over $13,225 at the recent share price of around $27.25. That's a much lower investment level compared to what you'd need to invest in a fund with a lower yield. For example, you'd have to invest over $43,110 in an S&P 500 index fund to generate $500 of dividend income, given its currently low yield of less than 1.2%.
The Schwab U.S. Dividend Income ETF's income stream should steadily rise as the companies held by the fund increase their payments. Its current holdings have grown their dividends at a more than 8% annual rate over the past five years.
The fund's combination of a high current yield and solid dividend growth profile makes it an excellent one to buy and hold for income.
Should you invest $1,000 in Schwab U.S. Dividend Equity ETF right now?
Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,786!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,143,832!*
Now, it’s worth noting Stock Advisor’s total average return is 1,021% — a market-crushing outperformance compared to 190% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of November 17, 2025
Matt DiLallo has positions in Schwab U.S. Dividend Equity ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Recommended Articles
