SCHD
Schwab U.S. Dividend Equity ETF
SCHD tracks the Dow Jones U.S. Dividend 100 Index, focusing on high dividend yield with rigorous quality screens. Requires 10+ years of dividend payments and screens for financial health metrics including cash flow/debt and return on equity.
HDV
iShares Core High Dividend ETF
HDV tracks the Morningstar® Dividend Yield Focus Index™, focusing on high dividend yield companies with sustainable payout practices. Emphasizes dividend sustainability and company quality, with sector diversification constraints.
Key Metrics Comparison
| Metric | SCHD | HDV | Winner |
|---|---|---|---|
| Dividend Yield | 3.27% | 3.85% | HDV (+0.39%) |
| Expense Ratio | 0.06% | 0.08% | SCHD (-0.02%) |
| 5-Year Annual Return | 11.2% | 10.1% | SCHD (+1.1%) |
| Dividend Growth (5Y) | 8.5% | 6.2% | SCHD (+2.3%) |
| Number of Holdings | 104 | 78 | SCHD |
| Assets Under Management | $95.2B | $9.8B | SCHD |
| P/E Ratio | 15.2 | 14.8 | HDV |
| Beta (5-Year) | 0.85 | 0.78 | HDV |
| Sharpe Ratio | 0.95 | 0.87 | SCHD |
| Max Drawdown (2022) | -12.5% | -9.8% | HDV |
Performance Comparison
SCHD Performance
Higher total returns with better dividend growth. Strong performance in rising markets with quality-driven returns. Better risk-adjusted returns (Sharpe ratio).
HDV Performance
Higher current yield with lower volatility. Better downside protection during market stress. More defensive positioning with lower beta.
Strategy Analysis
SCHD Approach
Yield-focused dividend growth with financial health screens:
- Minimum 10 years of dividend payments
- Dividend yield > 2.5% requirement
- Cash flow to total debt > 50%
- Return on equity > 15%
- Market cap > $500 million
- Equal weight within sectors
- Focus on dividend growth potential
HDV Approach
High yield with sustainability and quality focus:
- High dividend yield requirement
- Dividend sustainability screening
- Sector diversification constraints
- Quality and low volatility factors
- Morningstar Economic Moat™ consideration
- Focus on current income stability
- Emphasis on downside protection
Total Return vs Current Income Trade-off
SCHD focuses on dividend growth + total return (3.27% yield, 8.5% growth, 11.2% total return), while HDV focuses on high current income + stability (3.85% yield, 6.2% growth, 10.1% total return). This represents the trade-off between higher growth potential (SCHD) vs higher current yield and lower volatility (HDV).
Dividend Analysis
SCHD Dividend Profile
Moderate current yield with strong growth. Focus on companies with proven dividend history and financial strength for sustainable growth.
HDV Dividend Profile
Higher current yield with moderate growth. Focus on sustainable high yields with quality screens for dividend safety and stability.
Sector Allocation
SCHD Sectors
HDV Sectors
Key Difference: SCHD has more balanced sector exposure with technology representation, while HDV is heavily concentrated in defensive sectors (Healthcare, Consumer Staples) and traditional dividend payers (Energy, Utilities).
Top 5 Holdings
SCHD Top Holdings
HDV Top Holdings
Note: HDV has significantly higher concentration in top holdings (top 5 = 35% vs SCHD's 22%), with more exposure to traditional high-yield sectors like Energy and Telecom.
Investment Recommendation
💰 Choose SCHD If:
- Total return is your priority (11.2% 5-year)
- Dividend growth matters (8.5% growth rate)
- You want better sector diversification
- Lower expense ratio is important (0.06%)
- You prefer more holdings (104 vs 78)
- Better risk-adjusted returns matter (Sharpe 0.95)
- You want some technology exposure
🛡️ Choose HDV If:
- Current income is your primary goal (3.85% yield)
- Downside protection matters most (beta 0.78)
- You want more defensive sector exposure
- Lower volatility is critical
- You prefer traditional dividend sectors
- Dividend sustainability is your main concern
- Better performance in bear markets
🏆 Overall Winner: SCHD
For most investors, SCHD offers better total returns, stronger dividend growth, and superior risk-adjusted performance. While HDV provides higher current yield and lower volatility, SCHD's combination of growth, quality screening, and balanced approach makes it the preferred choice for long-term dividend investors seeking both income and capital appreciation.