ฝัง
- เผยแพร่เมื่อ 26 ก.ค. 2024
- The popular SCHD Dividend Stock ETF just increased their latest dividend distribution by 24%! However, is this dividend growth rate realistic? Today, I look at the numbers and analyze a more realistic look at the actual dividend growth rate that has occurred (and can possibly be expected going forward).
#dividend #etf #schd
0:00 INTRODUCTION: If everything goes according to plan, SCHD will become a Top 5-6 Core position for me.
0:25 Instant Dividend Stock Diversification
0:37 Only 30% overlap with my existing portfolio of 36 positions (37 positions with SCHD).
1:18 PPC IAN DIVIDEND PORTFOLIO OVERLAP ANALYSIS
1:27 29.09% Overlap, 70.91% Net New Positions
2:01 SCHD DIVIDEND DISTRIBUTION HISTORY ANALYSIS
2:13 The latest distribution was up 24% year-over-year, but let's have realistic expectations.
2:38 EXCEL ANALYSIS
2:58 The distributions fluctuate because the ETF holds 100 or so dividend stocks, that changes over time. Different stocks pay on different schedules.
3:33 Latest distribution vs. 1 year ago (24.0%) Don’t get so excited, we cannot look at just one quarter
4:09 Please connect with me on Twitter (X) and Instagram.
4:38 2024-to-date vs. 2023-to-date (13.8% dividend distribution growth)
5:51 My Strategy: I am utilizing SCHD to boost portfolio-wide dividend growth (enhance my long-term dividend yield on cost)
6:50 Last four distributions vs. prior four distributions (8.9% dividend distribution growth rate) - I believe this is a really realistic analysis for future possible dividend growth
7:39 Starting dividend yield is 3.67%
7:49 I'm buying because my yield-on-cost can go up over time
8:49 Dividend growth rates are slowing a bit these days, in this higher interest rate environment
10:00 2023 distributions vs. 2022 distributions (only 3.77%) - This was a very slow dividend growth period
11:00 It's important to be realistic with SCHD, the dividend may grow slowly during certain periods
11:14 5-Year Dividend Growth CAGR (12.9%) - Comparing last 4 quarters vs. comparable 4 quarters 5-years prior
12:30 Is 12.9% sustainable? Maybe if interest rates go down, again.
14:47 I'm personally thinking dividend growth will be around 8.9%, on average, but I'm hoping for higher.
15:23 PORTFOLIO OVERLAP ANALYSIS
15:35 SCHD METRICS ANALYSIS
16:25 I like to buy ETFs and stocks when they have not gone up a lot. I like out-of-favor, high-quality, value stocks.
17:40 TTM PE is 16.21, a fair value
17:56 Starting yield of 3.67%
18:07 Payout ratio of 59.5% (some room to grow dividend, but may indicate slower dividend growth)
19:41 DISCLOSURE AND DISCLAIMER
DISCLOSURE: I am long SCHD. I own this ETF in my personal dividend stock portfolio.
DISCLAIMER: All information and data on my TH-cam Channel, blog, email newsletters, white papers, Excel files, and other materials is solely for informational purposes. I make no representations as to the accuracy, completeness, suitability or validity of any information. I will not be liable for any errors, omissions, losses, injuries or damages arising from its display or use. All information is provided AS IS with no warranties, and confers no rights. I will not be responsible for the accuracy of material that is linked on this site.
Because the information herein is based on my personal opinion and experience, it should not be considered professional financial investment advice or tax advice. The ideas and strategies that I provide should never be used without first assessing your own personal/financial situation, or without consulting a financial and/or tax professional. My thoughts and opinions may also change from time to time as I acquire more knowledge. These are, as discussed above, solely my thoughts and opinions. I reserve the right to delete any comments for any reason (abusive in nature, contain profanity, etc.). Your continued reading/use of my TH-cam Channel, blog, email newsletters, whitepapers, Excel files, and other materials constitutes your agreement with and acceptance of this disclaimer.
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IMPORTANT ANNOUNCEMENTS:
Thanks for watching! Please don't forget to "like" and "subscribe". Please let me know in the comments below what you think about SCHD and other dividend stock ETFs.
HELPFUL RESOURCES (Related to SCHD):
Here’s my last video about how I traded SCHD paired with a high-yielder: th-cam.com/video/uPRw-51-jnA/w-d-xo.htmlsi=_mKcKd88YQmc-k30
Should I sell my individual dividend stocks and put it all in SCHD? I contemplate this question in this video: th-cam.com/video/dqQsf8Dg7a0/w-d-xo.htmlsi=y78D8LYkVfll6eCj
Learn why SCHD is my favorite dividend ETF in this video: th-cam.com/video/Oz0vUKH092Y/w-d-xo.htmlsi=bAwEkBQ1Mkjr8Ffs
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(Disclosure and Disclaimer: I’m long SCHD. Please see video description for all disclosures and disclaimers.)
I have roughly 900 shares of SCHD and it’s the only ETF I have. I will continue to throw money in this ETF until I am a Millionaire.
This is awesome! Thanks for sharing! (Disc: I’m long SCHD)
I seee that etf very slow please help me to understand
You could grow it faster with VTI
@@markjou9799 For someone closer to retirement (or in retirement), VTI is too volatile. VIG is a good ETF to pair with SCHD, and it has only a 20% market-weight overlap.
SCHD is a machine. 12 years of dividend growth, 10Y CAGR of 11.01%, 5Y CAGR, 12.88%. I use tools like Seeking Alpha and Portfolio Visualizer to look at its history. Amazing ETF.
Thanks for sharing! (Disc: I’m long SCHD)
Total returns last 10 years average
Dividends and NAV included
VOO: 12.83%
SCHD: 10.73%
The interesting point with those two is that SCHD is mostly goods and VOO is mostly tech.
The two together have less than 3% overlap and, to me, that is fantastic.
I love SCHD. As a dividend investor, this ETF is the place to be.
I believe that all value stocks (dividend stocks) will sky rocket when interest rates start to come down.
I continue to add to this ETF blindly as I truly believe in its way to pick and drop securities. Currently own 2,900 shares which I’m not using for retirement until 3 years from now.
It’s just an easy way to invest without the headaches.
Keep up the good work
Total returns last 10 years average
Including dividends reinvested
VOO: 12.83%
SCHD: 10.73%
Awesome video as usual. It’s always inspirational and never stale. Happy 4th Ian!
Thanks so much!!! Happy 4th!
The game is long, and as said in sports, something like: "Offence gets you to the play-offs, but defense wins championships."
Great analogy! Love it! (Disc: I’m long SCHD)
Happy 4th, Ian., since retiring, it's all about income for me. 5-10 years ago SCHD would be in my port but today the yield not enough.
Can you share with us your etf's? Jepi? Vym?
Happy 4th, my friend! I completely understand what you are saying. It's definitely a long-term dividend growth (yield on cost) ETF (and not a high-current-yielder). Wishing you all the greatest, and thanks for being here all these years! (Disc: I'm long SCHD)
Which stocks or ETFs did you move too? I’m close to retiring as well.
I'm a long time holder for SCHD. Almost a full 12 months now and I like it pretty well. I think it does decent even in bad interest rates. Considering I think the real interest rates are far worse than they say it is, if they cut I believe it could do very very well. Who knows though time will tell. Also the capital appreciation of the stock isn't why most people buy SCHD. If you want capital appreciation there are better options. In any case Im going to keep buying unless some huge red flag shows up. The readjustement to the companies put in my opinion is a good thing.
Thanks for sharing! (Disc: I’m long SCHD)
I'm happy to have this as around 10% of my portfolio despite the 30% withholding tax for the reasons you talk about in the video. It's a good way for foreigners to get exposure to US dividend stocks while managing risk. (Darryl in Singapore)
Way to avoid the tangent. But,,,,,, that's probably your next video. Dividends and dividend growth vs inflation and lessons learned over the past 3 years, with expectations for the future !
Send it Ian!!!
Happy 4th of July my friend.
Go America!!
Always a great use of time joining you video by video!
Thank you so much for your very kind words, my friend!!! I truly appreciate it!
@@ppcian Of course... Hoping to get you on Masters of the market soon... Many viewers have requested your appearance too!
Excellent video, Ian, thanks!
Thanks so much for your kind words!
Thanks for the Independence Day video Ian! I enjoyed it 👍
Thanks for your kind words! Happy 4th!
Yes. I have SCHD in my Roth abs my regular brokerage account. Love it. 👏🏾👏🏾👏🏾👏🏾
SCHD is a monster i can’t wait to live off this ETF
I love it! Same here! (Disc: I’m long SCHD)
My biggest position, buying it last year when it was 69$ cost basis
Right on! Thanks for sharing! (Disc: I’m long SCHD)
Cheers Ian from our Paris vacation-made possible by over three decades of dividend investing. Loved seeing you and your beautiful family enjoying time together in Hawaii! Thanks for your investment of time to create this great community of long term investor.
This is so awesome, my friend!!! Have an amazing time! And, thank you for your incredibly kind words.
What do think about splitting SCHD and DGRO 50/50?
I do that, they compliment each other.
@@international_dividend Yes. I just split my SCHD position with DGRO. I had to sell 1/2 of it and it was a huge sale.
@@BW-kv9wj dgro will provide a bit more growth with exposure to tech, while still providing dividend growth. Schd is a hedge against a market downturn. Perfect combination.
Happy 4th of July Ian. Schd truly brings independence to all who own it.
Happy 4th, Bruce!!! I like that! Wishing you all the greatest. (Disc: I’m long SCHD)
Let’s go SCHD! And let’s go America! I am long both positions
Yes!!! (Disc: I’m long SCHD and America too!)
Awesome video ian
Thank you!!!
Happy 4th for you and your family Ian..🎉🇺🇲
Thanks, my friend! Same to you and yours!!!
I was just watching schd videos when this was uploaded
Perfect timing! (Disc: I'm long SCHD)
I'm buying every down day until I have $100,000 in it
Great video
Thank you so much!!!
SCHD is by far my largest holding as I traded all my slo-gro consumer staples for it 1 1/2 years ago. I'm not getting too excited by the 24% boost. Some of it is due to the March reconstitution i.e. the ETF exchanged low yielders for high yielders. I also heard stories that the March reconstitution resulted in excess cash which was distributed with the 7/1 dividend. Not sure if this is true though.
I'm expecting a 6% to 8% long-term dividend CAGR going forward.
Great insights! Thank you for sharing! (Disc: I’m long SCHD)
Thanks for the video Ian. This is a good time to accumulate SCHD for several reasons. As you mentioned, price has not appreciated much in the past several years. Hence, the relatively low price results in a pretty good starting dividend yield. Additionally, it's a good way to diversify from the tech-heavy SP500. The winners from the past 10 years often are not the winners for the next 10. Investing in SCHD now leverages that observation, while locking in a good starting yield. It's laughable that SCHD gets a bad rep from little price appreciation over a few years. I guess very few investors remember and learn from history.
One of the purpose of SCHD is to keep the price of the ETF levelling with inflation but not much more and pass the value to investors via the dividend payments. JEPI has a similar "philosophy"
SCHD ROCKS!!! GREAT VIDEO!!!!
Really appreciate your kind words! Thank you! (Disc: I’m long SCHD)
I love SCHD also FDVV is amazing
I added some Pepsi, I try to increase quality stocks as I have too much in reits. They yield fine, but I believe as munger did that return on capital is most important for the long term.
Pep is like an ETF with all the different products they sell.
i just have all my $ in SCHD and SCHG and as I get closer to my last day of normal work I will move some of the $ from SCHG to SCHD
As a retiree, I love to see my dividend growth as high as possible. However, my goal is to have stocks / ETF's whose dividend growth beats inflation over time! SCHD is the largest position in the dividend portion of my portfolio.
Hey Ian, question. Do you own any Reits? The valuation is ridiculously low for some world class Reits due to the interest rates. However, the balance sheet remains strong and yields are high! Looks like a great opportunity for monthly income. Happy 4th of July!
Sure do! Realty Income (O) is a large position for me, and I plan on adding more. I love the monthly income. Wishing you all the greatest, and Happy 4th!
This was the first distribution following the reconstitution (which many complained about at the time), so I think we might see low double digit dividend growth. Also, the price appreciation is fine for what is mostly large cap value stocks. Value will once again have its day at some point.
Thanks for sharing! Great points. Do agree on value having its day again. (Disc: I’m long SCHD)
Its looking like Voo outperform them all in growth and dividends. Also its fun to hold .
My biggest holding SCHD. I don’t know if this is a good thing or bad thing. It hasn’t done much lately. I’m retired and that’s why I own it.
My portfolio just cracked $50 million this week I think having a large position in SCHD is a great move in retirement. You are right int hat it has been a pretty lame couple years on the price growth front. But the solid yield and dividend CAGR keep it producing in these times. When the growth/tech run cools off, you'll be a happy camper. SCHD will protect the portfolio value that other holdings have built over the past couple years.
Great, I need help to growing my portfolio, are you a Pro?
60/30 schd dgro. Hope what you say is true.
I like the positivity from your videos. Helps me stay motivated.
Why not 50/50?
@@BW-kv9wj I wouldn't mind 50/50 but for now this is what I like.
Thanks for sharing and thanks for your kind words!!! (Disc: I’m long SCHD)
I like schd etf it does the work of analyzing stocks and it pays a decent income leaving me more time to go for walks i also have dgro
Great thoughts!!! DGRO is high on my watch list. Thinking of adding a position as soon as SCHD is built to size. More time for walks is a great thing. (Disc: I’m long SCHD)
While I'm holding on to SCHD, I won't add to my 1.5% position but rather to BDCs like HTGC, CSCW. More than double the dividend and much higher appreciation.
But those are Companies, not ETFs...?
@@Coyotehello True! However, you can view BDCs as sort of funds, maybe as CEFs.
You’re right in that the share price has not kept up with the Market but that’s just because the Market is being carried by Tech and the remainder of the market is not doing as well. But that just means SCHD is cheaper to buy!
Agreed and great thoughts! (Disc: I’m long SCHD)
There has to be a limiting factor though. The CAGR just can’t sustain 10% and if they roll out of positions into new ones won’t that just cut the yield in favor of dividend growers?
I guess if the yield gets “too high” more people will just pile into SCHD and drive up the price thereby lowering the yield? Or is the etf price tied to the underlying the associated NAV and this would just show up in the premium/discount to NAV.
I like SCHD as a concept I just struggle with the long term execution of its concept relative to something more straight forward like a market index fund.
Just bought SCHD❤
Thanks for sharing! (Disc: I’m long SCHD)
Total returns last 10 years average
Dividends and NAV included
VOO: 12.83%
SCHD: 10.73%
This is fact so know what you own
Here is an interesting fact. SCHD is mostly goods, VOO is mostly tech, between the two of them there is less than 3% overlap. That i sfantastic.
I think we'll probably see 10.5-12% full year divy growth 2024 vs 2023. The beginning of 2023 showed weaker dividends/growth (especially 2nd quarter) from historical. This makes for a weaker comp for 2024, hence the super impressive 24% YoY growth. My guess would be about 8-10% long term growth moving forward; but that's still pretty impressive for a passive, diversified portfolio with that kind of a starting yield and divy CAGR (even though lower than the recent history). I was looking at some of the same metrics the other night.
Great thoughts! Thanks for sharing! (Disc: I’m long SCHD)
While working I invested some salary in my employers 457(b). Now I’m retired (67 yr old). Can/ should I move it to an IRA and invest in ETF’s?! ROTH, Traditional, penalties?
Thanks
SCHD is a core holding in my portfolio and anticipate it being so for the near future,,i think SCHD is one of Schwabs darlings so they'll put a bit more emphasis on this ETF to get it right and continue its cult like status..
Thanks for sharing and great points! (Disc: I’m long SCHD)
Does dollar cost averaging matter for etf's?
SCHD stocks are risky when treasury gives 5% risk free and low rates environment and NVDIA flying high
Just buy VOO or SPYI
Is there an ETF which applies the algorithm of SCHD to the universe of international stocks and is domiciled in a jurisdiction which doesn't charge withholding tax?
SCHY?
@NOT-FINANCIAL-ADVICE. Unfortunately no. Different algorithm and dividends subject to US withholding tax.
Why do you use EPS when establishing payout ratio? Dividends are paid from free cash flow.
I use dividends-per-share/earnings-per-share as payout ratio, since this is how the metric is classically-defined in the finance industry: www.investopedia.com/terms/p/payoutratio.asp I do agree that looking at dividends as a % of free cash flow is a great way to look at things too (maybe even better). I do this a lot when I'm analyzing single companies. For this particular ETF that holds ~100 positions, I do not readily have free cash flow metrics on an aggregated/weighted basis. So, I use the numbers that are available/provided by Schwab. Wishing you all the greatest. (Disc: I'm long SCHD)
@@ppcian thanks- while not free cash flow, Schwab does list price to cash flow on the SCHD page for further analysis.
Need it for 45 so I can buy in....🤑🤑🤑🤑
Let’s hope for a market correction!
Happy fourth of July hope everyone is enjoying the holiday
Thanks, my friend! Same to you!!!
well, over 10 years it looks like the dividend has approximately tripled...not bad! and price doubled. also not bad!
I like a combo of JEPI and JEPQ far better.
I add to SCHD weekly, especially now that the whole Mag7 has become detached from reality. Your average sp500 and total market etf's are so overweight in a small concentration of stocks that it isn't doing its job of diversifying. There is a whole lot of fomo going on right now. There will be bag holders upon the correction.
I love this! I completely agree. (Disc: I’m long SCHD)
how is that sbux investment going ian. You seems to talk about it constantly but you have been quiet.
It’s doing great! I am adding a bit more at these prices and I’m reinvesting dividends. I’m pleased with the opportunity to add while it’s been trading at these levels, as I have a lot more I want to accumulate. (Disc: I’m long SBUX)
Can't imagine why anyone would invest in this unless he needed the dividends to pay expenses. Puzzling.
Combine schd and dgro and you will get the best combo
I have been thinking about adding DGRO after building SCHD to-size. Really like DGRO too. (Disc: I’m long SCHD)
Well with GDRO + SCHD you have a fund overlap of 36% and 9% or by weight a 20% overlap between the two. A portion of your investments are in the same stocks.
I own 15% neo SPYI etf 85% BIL treasury ETF. Monthly dividends are better for income.
I pair my schd with udow 80% 30%
Thanks for sharing! (Disc: I’m long SCHD)
Giving 110%. Nice!
Too bad we cannot buy SCHD in Europe :(
I wish there was a way, too! With such a large market cap, you would think Schwab would want to expand the ETF globally. Thanks for sharing. (Disc: I'm long SCHD)
In Switzerland you can :) I love my SCHD.
SCHD hasn’t beat the SP500 over the long term, so in Europe you can easily just buy an S&P500 ETF and you will be as good as buying SCHD.
If you need income, just sell 1% of your S&P500 ETF each year to compensate but since it’s more growth focus it will be equivalent as having an SCHD ETF.
@@charlesdesaintemarie9499That leave you vulnerable to a sequence of returns risk. What do you do if the S&P500 goes down instead of up?
Maybe you need to find a different broker? In Israel there is no limit..
gettin hot - glowing at 2.5min - nice take on SCHD
hello
first
Thanks for being first!
I dont like SCHD I like VTI much better.
Two different types of ETFs for completely different purposes.
SCHD is like the S&P without technology stocks, no thanks
That could be a good thing depending on if tech stocks are highly overvalued which there is still debate on. Depends on your investing interests and metrics you go by
Ok Bill Gates 👋😂
SCHD+ VGT less than 3% fund overlap. Perfect combo.
Now compare the no brainer QQQM
SCHD stocks are risky when treasury gives 5% risk free and low rates environment and NVDIA flying high
Just buy VOO or SPYI
SCHD stocks is risky when treasury gives 5% risk free and low rates environment and NVDIA flying high
Just buy VOO or SPYI
If you’re young, that’s fine. If you’re older (near retirement age), your plan is too risky. Oh, and SCHD isn’t “too risky” as compared to Treasury bills. With SCHD, you get solid dividend *growth* over time AND capital appreciation. You don’t get that with bonds.