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Unlock High Yields with the Top-Rated Dividend ETF Under $100

HomeUnlock High Yields with the Top-Rated Dividend ETF Under $100

Unlock High Yields with the Top-Rated Dividend ETF Under $100

Unlock High Yields with the Top-Rated Dividend ETF Under $100

Summary

Investors seeking high dividend yields must be cautious not to overextend themselves on income. When it comes to Exchange-Traded Funds (ETFs), a curated screening process is crucial. One standout high-yield dividend ETF focuses on company quality, high yields, and dividend growth.

The Schwab US Dividend Equity ETF: A High-Yield Dividend Investment

TheSchwab US Dividend Equity ETF(NYSEMKT: SCHD) stands out as an attractive option for income investors. With a trading price under $100 per share, this ETF offers a generous yield and has consistently delivered growing dividend payments.

How the Schwab US Dividend Equity ETF Works

From a big-picture perspective, the Schwab US Dividend Equity ETF essentially does what an individual investor would do if buying dividend stocks one by one. The ETF invests in companies that are financially strong and well-run, have histories of dividend growth, and offer attractive yields.

To achieve this, the Schwab US Dividend Equity ETF tracks the Dow Jones Dividend 100 Index. This index focuses on companies that have increased their dividends for 10 consecutive years or more (real estate investment trusts, or REITs, are excluded from consideration). A composite score is then created based on several key factors:

  • Cash flow to total debt: Examines financial strength.
  • Return on equity: Evaluates business quality.
  • Dividend yield: Reflects dividend attractiveness.
  • Five-year dividend growth rate: Represents stability and management's commitment to returning capital to shareholders.

The 100 highest-scoring companies are included in the Dow Jones Dividend 100 Index, weighted by market capitalization. The Schwab US Dividend Equity ETF replicates the holdings and returns of the index with a modest expense ratio of 0.06%.

Why the Schwab US Dividend Equity ETF is a Smart Investment

The first reason to like the Schwab US Dividend Equity ETF is that its underlying screening criteria largely match what income investors are usually looking for in a dividend stock.

The second reason to buy it is performance. The ETF's dividend yield is 4.0% as of this writing, well above the scant 1.3% you would collect from anS&P 500index fund.

Data-Driven Performance

Data byYCharts.showcases the ETF's consistent dividend growth and trend of increasing income stream along with share price appreciation. This is the ideal outcome for most dividend investors.

Meanwhile, thanks to regular rebalancing by the Dividend 100 index, the Schwab US Dividend Equity ETF regularly adjusts its holdings so it is invested in the most attractive dividend stock candidates based on the screening requirements.

Why You Should Let the Schwab US Dividend Equity ETF Do the Hard Work

If you have $100 and want to own a reliable dividend investment, then the Schwab US Dividend Equity ETF is likely to be a smart choice for you. That $100 will get you three full shares as of this writing, and if your brokerage offers fractional shares, you can buy closer to four of them.

Sure, there are dividend-focused exchange-traded funds that are less complicated. They might track indexes that simply select stocks based only on dividend yield, for example. But buying based on yield alone can leave you with a portfolio of high-risk investments. The Schwab US Dividend Equity ETF helps you screen for quality dividend stocks without having to do any of the complicated work.

Should You Invest $1,000 in Schwab U.S. Dividend Equity ETF Right Now?

Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the10 best stocksfor investors to buy now… and Schwab U.S. Dividend Equity ETF wasn’t one of them.

The 10 stocks that made the cut could produce monster returns in the coming years. Consider whenNetflixmade this list on December 17, 2004... if you invested $1,000 at the time of our recommendation,you’d have $713,547!*Or whenNvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you’d have $966,931!*Now, it’s worth notingStock Advisor’s total average return is1,062% — a market-crushing outperformance compared to177%for the S&P 500. Don’t miss out on the latest top 10 list, available when you joinStock Advisor.See the 10 stocks »*Stock Advisor returns as of June 30, 2025

Conclusion

The Schwab US Dividend Equity ETF offers a reliable dividend investment option with a generous yield and consistent dividend growth. By replicating the Dow Jones Dividend 100 Index, this ETF provides a quality-focused approach to investing in high-yield dividend stocks. If you're looking for a smart investment with your $100, consider letting the Schwab US Dividend Equity ETF do the hard work for you.

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