I recently bought even more shares Schwab US Equity Dividend ETF (NYSEMKT: SCHD ). This was the last in a series of purchases as I build my position in this high dividend ETF.
There are two reasons I can’t stop Invest in the Schwab US Dividend Equity ETF.
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I love collecting dividend income. This recurring cash flow gives me more money to invest while putting me on the path to financial freedom.
The Schwab US Dividend Equity ETF fits my strategy of generating more dividend income. The fund tracks an index (Dow Jones 100 US Stock Index) that measures the performance of 100 High yielding dividend stocks Selected based on several dividend quality characteristics, including dividend yield and five-year dividend growth rate.
The ETF currently offers a dividend yield of 3.5% based on its payouts over the last 12 months. It is three times higher than S&P 500Dividend yield (about 1.1%). As a result, the fund enables me to generate more passive income per dollar invested than lower-income alternatives.
Meanwhile, holding funds have steadily increased their shares. Over the past five years, these current stocks have increased their payouts by more than 8% per year. As a result, the Schwab US Dividend Equity ETF has consistently distributed more income to investors:
The fund’s high current yield and stable income distribution will enable me to collect more passive dividend income in the future.
Dividend income is just part of the draw. The Schwab US Dividend Equity ETF also has a strong track record of delivering attractive total returns (dividend income and price appreciation). Since its inception in October 2011, the fund has delivered an average annual return of 12.9%. It has also delivered annualized returns of over 10% over the past five and 10 years. At the same time, it is Get off to a strong start this year.
A major driver of these strong returns is the fund’s strategy of investing in companies that grow their profits. Over the past 50 years, the average farmer holding shares in the S&P 500 has delivered an average annual return of 10.2%, according to data from Ned Davis Research and Hartford Funds. These are companies with no change in dividend policies (6.8% return), dividend reductions and eliminations (-0.9% return), and companies that do not pay dividends (4.3%).
Dividend income
