“SCHD ETF Makes Waves with 3-for-1 Split: Is This Dividend Fund a Buy?”

The Schwab U.S. Dividend Equity ETF (SCHD) recently made headlines with a 3-for-1 stock split that took effect on October 10th. This move, while uncommon for ETFs, doesn’t fundamentally change the investment prospects of the fund. SCHD remains a solid choice for investors looking for dividend income, diversification, and low expenses.

SCHD’s strategy is to invest in the Dow Jones U.S. Dividend 100 Index, focusing on quality and sustainability of dividends. The fund holds a diversified portfolio of 100 blue-chip dividend stocks, with top holdings like Home Depot, BlackRock, and Lockheed Martin. These stocks have strong Smart Scores, indicating solid fundamentals.

One of the key attractions of SCHD is its attractive yield of 3.4%, more than double the S&P 500’s current yield. The fund has a track record of dividend consistency and growth, making it appealing for income-seeking investors. Additionally, SCHD’s low expense ratio of 0.06% makes it a cost-effective investment choice.

While SCHD has slightly underperformed the broader market in recent years, its double-digit annualized returns over a 10-year period are commendable. The fund’s defensive qualities, lower volatility, and potential for upside from multiple expansion make it a valuable addition to an investment portfolio.

Analysts have a Moderate Buy rating on SCHD, with a price target implying 5% upside potential from current levels. Overall, SCHD’s strong dividend yield, diversified portfolio, low expenses, and potential for outperformance in a value-oriented market make it a compelling investment option for investors seeking income and stability.