SCHD Is Up 20% and Offers Investors a Compelling Yield. But These 3 Dividend Stocks Could Be Even Better Buys Now.
Schwab U.S. Dividend Equity ETF is a solid high-yield option, but you may want to consider PepsiCo, Enterprise, and Realty Income instead.
Overview
Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) has had a great year so far in 2026, up roughly 20% as of this writing. That's way better than the S&P 500 index (SNPINDEX: ^GSPC), which is up "only" about 13%. And Schwab U.S. Dividend Equity ETF offers a compelling, and above-market, 3% yield. Only you can do better than that if you buy individual stocks, such as PepsiCo (NASDAQ: PEP), Enterprise Products Partners (NYSE: EPD), and Realty Income (NYSE: O), all of which yield over 4%.
Schwab U.S. Dividend Equity ETF tracks an index, but that index isn't just a rote list of stocks. It is created using a screening approach. The first step is to consider only companies with at least 10 years of dividend increases. Real estate investment trusts (REITs) and master limited partnerships (MLPs) are excluded from consideration because of their unique business structures. Then a composite score is created based on cash flow-to-total debt, return on equity, dividend yield, and a company's five-year dividend growth rate. The 100 stocks with the highest scores are included in the index.
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Originally published at www.fool.com.