■ ETF · July 28, 2026
SCHD Yields 3.3% and Targets 15th Consecutive Dividend Increase in 2026
The Schwab U.S. Dividend Equity ETF (SCHD) yields 3.3% and is on track for its 15th consecutive year of dividend growth in 2026, with a five-year annualized growth rate of 7.5%.
Dividend Growth and Yield
The Schwab U.S. Dividend Equity ETF (SCHD) currently offers a dividend yield of 3.3%, based on a trailing 12-month payout of approximately $1.05 per share. If the fund maintains its historical pattern of steady payment increases, it is on pace to achieve its 15th consecutive year of dividend growth in 2026.
Beyond the current yield, SCHD has demonstrated strong dividend growth over time. Its five-year annualized dividend growth rate stands at 7.5%, while the 10-year average growth rate is 10.2%. This consistent growth helps preserve purchasing power against inflation. For investors who purchased the fund five years ago, the annual dividend income on their original investment now exceeds 3.3% due to cumulative increases.
Index Methodology and Quality Screens
SCHD tracks the Dow Jones U.S. Dividend 100 Index, which requires companies to have at least 10 consecutive years of dividend payments for inclusion. The index screens potential components based on cash flow to debt, return on equity (ROE), dividend yield, and the five-year dividend growth rate. These quality filters reduce exposure to companies with excessive debt or weak dividend growth, selecting firms that combine strong fundamentals with sustainable payout growth.
This methodology contrasts with broader dividend strategies, such as the Vanguard High Dividend Yield ETF (VYM), which selects the top half of U.S. stocks by forecasted yield. VYM yields approximately 2.3% and offers wide diversification but lacks the specific quality focus of SCHD.
Portfolio Characteristics
SCHD has $103 billion in assets under management and an expense ratio of 0.06%. Its top holdings include Abbott Laboratories (4.54%), Merck & Co. (4.47%), and UnitedHealth Group (4.41%). The fund's emphasis on quality, durability, and sustainability aims to provide a growing income stream over time, with the above-average yield being a byproduct of the selection process.
For those reinvesting dividends or relying on income, the fund's dividend history shows a pattern of regular quarterly increases, supporting both income growth and long-term capital appreciation.
What it means for income investors
SCHD's combination of a 3.3% yield and a 10-year average dividend growth rate of 10.2% provides a growing income stream that has historically outpaced inflation. The fund's quality-focused index methodology may offer more sustainable dividend growth compared to broader high-yield strategies.
Reporting based on: The Motley Fool. Figures verified against market data where available.