“HDV vs. SCHD: Which Dividend ETF is the Better Choice for Investors?”

The iShares Core High Dividend ETF (HDV) and the Schwab U.S. Dividend Equity ETF (SCHD) are two popular dividend ETFs that offer investors exposure to high-quality U.S. companies with attractive dividend yields. Both ETFs have low expense ratios, ranging from 0.06% to 0.08%, making them cost-effective options for dividend investors.

HDV focuses on an index composed of high dividend-paying U.S. equities, with 75 stocks in its portfolio. Its top 10 holdings make up 57.9% of its assets, and the fund boasts a strong assortment of Smart Scores, with nine out of its top 10 holdings receiving Outperform-equivalent ratings. HDV has a dividend yield of 3.5% and has been paying dividends for 12 consecutive years.

On the other hand, SCHD invests in an index focused on the quality and sustainability of dividends, with 100 stocks in its portfolio. Its top 10 holdings account for 40% of its assets, and seven of them feature Outperform-equivalent Smart Scores. SCHD has a slightly higher dividend yield of 3.7% and has been growing its dividend payout at a strong 11.8% CAGR over the past five years.

When comparing the long-term performance of the two ETFs, SCHD has outperformed HDV over the past five and 10 years, with annualized total returns of 13.4% and 11.0%, respectively. HDV, on the other hand, has returned 7.8% and 8.3% over the same periods. Additionally, SCHD has a better dividend growth rate, making it the preferred choice for investors looking for long-term returns and dividend growth.

Both ETFs have similar expense ratios, with SCHD being slightly cheaper at 0.06%. While HDV has performed better in the recent past, SCHD’s superior long-term performance and dividend growth make it the better choice for investors. Analysts also have a more bullish outlook on SCHD, with a higher average price target and more Buy ratings compared to HDV.

In conclusion, while both HDV and SCHD offer attractive dividend yields and cost-effective options for investors, SCHD stands out as the preferred choice for its superior long-term performance, dividend growth, and analyst recommendations. Investors looking for a dividend ETF with strong returns and growth potential should consider SCHD as a top pick in their portfolio.