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SCHD: The Best-Positioned Dividend ETF Against The Coronavirus

Published Tue, 17 Mar 2020 09:20:56 -0400 on Seeking Alpha

SCHD is a dividend-focused ETF with a portfolio of defensive, high-quality stocks that should fare better than the average stock against the coronavirus.
The ETF, currently, offers a marvelous starting yield of 4.21%, and the annual distribution has grown every year since the fund's inception in late 2011.
The portfolio is stacked with Dividend Kings, Aristocrats, and Contenders.
The previous, phenomenal bull run is over for SCHD; now, it's time to buy shares in preparation for the next one.
The Schwab U.S. Dividend Equity ETF (SCHD) is, in my humble opinion, the perfect fund for dividend growth and income investors to play defense against the rapidly spreading coronavirus. It is based off of the Dow Jones U.S. Dividend 100 Index, which includes high-yielding stocks that have a record of consistently paying and raising dividends. Beyond that, it selects companies by screening for fundamental strength relative to industry peers, based on financial ratios.
The ETF offers a 30-day SEC yield of 4.21% (or 4.03% based on TTM distributions) and has seen its annual distributions rise every year of its existence (since 2011). The weighted average price-to-earnings ratio for SCHD's holdings currently sits a hair under 14x, and price-to-cash flow is a stunning 9.32x. As of 12/31/19, the fund's return on equity sat at 33.22% and the holding's five-year earnings growth rate was 6.41%, according to the Fact Sheet.
From SCHD's inception in October 2011 to the end of 2019, it managed to achieve an impressive annual total return of slightly over 14%.
The fund has earned a coveted 5-star rating from Morningstar, and its expense ratio is an ultra-low 0.06%.
During this past month's coronavirus-induced stock market selloff, SCHD has performed slightly better than the S&P 500 (SPY) while generating significantly higher dividend income.
Data by YCharts
Why SCHD? Why Now?
But why is this ETF, in particular, the best way to invest in... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ALTRIA GROUP 44.46   13.2 3.36 3.36 7.23
VERIZON COMM 60.43   15.8 3.83 2.46 4.04
PFIZER 37.28   17.0 2.19 1.44 3.85
3M 170.58   20.6 8.28 5.76 3.41
BRISTOL-MYERS SQUIBB 49.61   13.1 3.80 1.64 3.38
EATON 87.30   17.0 5.14 2.84 3.27
CVS CAREMARK 63.90   17.9 3.57 2.00 3.14
COCA-COLA 55.11   33.6 1.64 1.60 2.94
PEPSICO 137.29   15.2 9.02 3.82 2.81
PROCTER & GAMBLE 122.77   90.3 1.36 2.98 2.49
LOCKHEED MARTIN 386.63   18.8 20.52 8.80 2.31
SPDR S&P 500 ETF 301.29   0.0 0.00 5.42 1.82


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