Schwab vs Vanguard: Which is the Better Dividend ETF?

The Vanguard Dividend Appreciation ETF (NYSEMKT:VIG) and the Schwab U.S. Dividend Equity ETF (NYSEMKT:SCHD) disagree astir successful dividend yield, assemblage tilts, and portfolio concentration, with SCHD offering a higher payout and heavier vulnerability to vigor and user antiaircraft stocks.

Both VIG and SCHD purpose to seizure the semipermanent benefits of dividend-paying U.S. stocks, but their approaches and resulting portfolios diverge successful important ways. This examination looks astatine cost, returns, risk, liquidity, and portfolio constitution to assistance investors determine which benignant whitethorn acceptable their needs.

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year play returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months.

Both funds are low-cost, with SCHD charging 0.02 percent points more, but SCHD stands retired with a notably higher dividend yield—more than treble that of VIG. For investors who worth income, this quality whitethorn beryllium material.

SCHD tracks 101 dividend-oriented U.S. stocks, focusing connected prime and sustainability of payouts. Its assemblage vulnerability leans heavy toward vigor (20%), user staples (18%), and healthcare (16%), reflecting a much antiaircraft tilt. Top holdings see Lockheed Martin (NYSE:LMT), Bristol Myers Squibb, (NYSE:BMY) and Texas Instruments (NYSE:TXN). With a money property of 14.3 years, SCHD is good established but much concentrated than galore wide dividend ETFs.

VIG, by contrast, holds 338 stocks and emphasizes exertion (27%), fiscal services (22%), and healthcare (17%). Its largest positions are Broadcom Inc (NASDAQ:AVGO), Microsoft Corp (NASDAQ:MSFT), and Apple Inc (NASDAQ:AAPL). This broader, tech-tilted portfolio delivers much diversification, but with a little output and somewhat higher beta than SCHD.

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These are 2 fantabulous dividend ETFs from 2 top-notch plus absorption firms. But they are importantly antithetic successful presumption of what they connection investors. Which 1 you similar depends connected what you are looking for.

The Schwab ETF is much concentrated and focuses connected dividend yield, which is the percent of the terms that goes to the dividend. The Schwab ETF’s 30-day output is beauteous precocious astatine 3.44%. It has a precocious output due to the fact that it tracks the Dow Jones U.S. Dividend 100 Index, which consists of the largest, astir stable, dividend-producing bluish spot stocks.