Lee Jackson
7 min read
Quick Read
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SCHD yields 3.8% at a 0.06% expense ratio, with CVX and ADP covering dividends comfortably at 69% and 61% payout ratios respectively.
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KMB is the fund’s biggest risk, with trailing GAAP EPS of $5.07 barely covering $5.08 paid out, while MO’s 6.2% yield holds despite 3.2% volume declines.
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SCHD’s March reconstitution acts as a built-in safety valve, dropping struggling payers before they drag down the fund’s income.
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Every stock in the Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) passed a quality screen to qualify. The question for income investors is whether the companies paying the dividends can keep raising them. The fund tracks the Dow Jones U.S. Dividend 100 Index, which screens for cash flow to debt, return on equity, yield, and five years of dividend growth. It yields about 3.8% and charges a 0.06% expense ratio. Six veteran dividend growers in the portfolio show why that income holds up. Two of them are running much closer to the edge than the other four.
Where SCHD’s 3.8% Yield Comes From
SCHD takes in ordinary cash dividends from its 100 stocks and pays them out quarterly. Each dollar of yield comes from a dividend a real company declares.
Holdings data come from the fund’s latest portfolio filing, dated May 31, 2026. At that point, SCHD held $94.9 billion in net assets, with the largest position at about 6.7% of the fund and the top 10 making up roughly 43.6%.
Together, the six names below account for about 14.1% of the fund. The index reconstitutes every March, which means a declining dividend payer can be dropped before it weighs on the fund’s payout for long.
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Six Payout Records Under the Microscope
Chevron Turns Hess Into Dividend Fuel
Chevron (NYSE:CVX) is the largest of the six at 3.8% of assets and yields 3.2%. Its quarterly dividend rose to $1.78 this year. The 2025 raise had already brought its growth run to 38 years.
