Prediction: This Dividend ETF's Yield Won't Stay Under 3.5% for Long
Here's my case for why the yield on the Schwab U.S. Dividend Equity ETF is about to go up.
Overview
The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) yields about 3.3% right now. That's modestly below its long-term average, and I don't think that will last for long. I expect the yield to climb back above 3.5% within the next year or sooner.
Since the beginning of 2023, this exchange-traded fund (ETF) has spent the majority of its time with a yield above 3.5%. It peaked in the first part of 2025 but has declined fairly steadily since then. Its current yield is actually the lowest it's been since late 2022.
But the current dip is largely a function of a strong price rally, not a change in the dividend distribution itself. Year to date, the Schwab ETF is up nearly 22%, and up 27% over the past year. This is actually the kind of behavior you want to see from a fund like this. It's paying out a sizable quarterly dividend, but it's adding significant share price appreciation on top of it.
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Originally published at www.fool.com.