Dividend Stocks Alert: 10 Top Holdings From the SCHD ETF

Mar. 8, 2023, 02:27 PM

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In the face of rising interest rates and still-elevated inflation, dividend stocks are quickly becoming a Wall Street favorite. In that regard, few exchange-traded funds (ETF) demand as much attention as Charles Schwab’s (NYSE:SCHW) Schwab Dividend ETF (NYSEARCA:SCHD).

What do you need to know about SCHD?

Well, SCHD remains a favorite among die-hard dividend fans. Indeed, despite its lukewarm performance over the last year — down almost 2% over the past year — loyalists remain committed to the fund.

Reasonably so, the simple, low-cost ETF tracks the return of the Dow Jones U.S. Dividend 100 Index. Index funds like SCHD have grown in popularity substantially in the face of growing economic uncertainty. With rock-bottom expense ratios, a more than 3% distribution yield, and strong long-term performance, SCHD represents a safe, solid investment choice for sustained growth. At least, that’s what investors have believed for more than 10 years since the fund first launched.

Because of its prioritization of dividends, many of the companies that make up SCHD, as expected, offer strong dividends to its investors. You won’t find any electric vehicle start-ups or high-growth tech companies here.

With the ex-dividend date coming up on March 22, ahead of the dividend distribution on March 27, interested investors have a limited window to jump aboard the fund to enjoy the dividend-rich fruits of their investment.

So, with that in mind, what companies are in the fund?

Top 10 Holdings in the SCHD ETF

It’s worth noting that because of the highly diversified nature of a fund like this, there aren’t any big swingers in terms of holdings. This isn’t the ARK Innovation ETF (NYSEARCA:ARKK). SCHD’s holdings reflect that.

  1. Broadcom (NASDAQ:AVGO) has the largest position in SCHD, making up 4.96% of the fund on $2.3 billion dollars in market value.
  2. Mobile phone giant Verizon (NYSE:VZ) is up next on the list with a total fund weight of 4.19% on $2 billion in market value.
  3. Cisco (NASDAQ:CSCO) holds the third spot on the list, making up 4.17% of the total fund on $2 billion in market value, the last company with over $2 billion in market value.
  4. New Jersey-based healthcare company, Merck & Co (NYSE:MRK), is up next on the list with a total fund weight of 4.15% on $1.9 billion in market value.
  5. Calculator maker Texas Instruments (NASDAQ:TXN) is fifth in SCHD, with a 4.07% fund weight.
  6. Defense giant Lockheed Martin (NYSE:LMT) holds the sixth spot on the list, making up 4.04% of the fund’s weight.
  7. Soda-maker Pepsico (NASDAQ:PEP) is the seventh most prominent holding in SCHD, with a 3.9% weight.
  8. Not alone, however, Coca-Cola (NYSE:KO) is right next door, making up 3.88% of the fund.
  9. Home Depot (NYSE:HD) holds the penultimate spot on the list with a 3.73% fund weight.
  10. Finally, investment banking giant BlackRock (NYSE:BLK) is the 10th largest holding on the list, with a 3.64% fund weight.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.

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