I'm excited to compare two favorite dividend stock ETFs, SCHD and DGRO. Learn about my favorite choice for my personal situation (SCHD), and how I'm now incorporating an ETF component in my individual dividend stock portfolio.
#dividend #stock #investing
Timestamps:
0:00 Introduction: I'm now a serious dividend stock ETF investor. I used to be only about individual dividend stocks. Now, my portfolio will morph to 70% individual positions and 30% ETF(s), mostly SCHD.
1:13 SEGMENT 1: My Story Has Changed, here's why I love ETFs for my own situation right now.
1:19 REASON 1: Single company risk is higher than ever before (ETFs offer immediate portfolio diversification)
1:56 REASON 2: My life has been more complex (ETFs make investing and life easier)
2:41 REASON 3: It's difficult to beat the total returns of SCHD and DGRO dividend ETFs. They are both at 11%+ annualized over the last 5 years.
3:10 My strategy will be a blend of individual stocks and ETFs.
3:33 SEGMENT 2: Comparing SCHD vs. DGRO
3:59 Very high level overview: How SCHD and DGRO compare
4:16 SCHD is more of a valueoriented index.
4:30 SCHD has a sweet spot dividend yield that aligns with my portfoliowide target.
4:47 DGRO has a lower starting yield, but invests in companies on a quicker growth trajectory.
5:51 Both ETFs are doing well, they are not far off their 52week highs. DGRO is only 2.6% off 52week high.
6:30 Sometimes when an individual stock plummets, it's cause for concern (HE example). Sometimes when an individual stock corrects, it's a value buying opportunity (RTX example).
7:41 SCHD is more valueoriented. The PE is 13.87. By contrast, DGRO has a PE of 16.94, indicative of fastergrowing companies.
8:08 SCHD has a solid 3.49% dividend yield. DGRO has a starting yield of 2.36% (it has fast dividend growers with lower payout ratios).
8:32 I use distributions from SCHD to help pay bills now.
9:07 I like SCHD because it chooses some positions I would not naturally select.
9:56 Surprise: SCHD has a faster dividend growth rate than DGRO. SCHD is at 13.9% 5year CAGR, DGRO is at 10.6% 5year CAGR.
10:23 I do think DGRO will have faster dividend CAGR going into the future.
10:44 SCHD has double the market cap of DGRO. Although DGRO is newer.
11:58 Over the last 5 years, both funds perform very well, in excess of 11% total returns. (SCHD slightly wins.)
12:55 With 11% annualized per year, with reasonable conservative dividendoriented ETFs, I'm impressed. And, would be hardpressed to beat these numbers.
13:48 SCHD has only 104 holdings. DGRO has a huge 428 holdings. For me, 428 feels heavy to me.
14:23 My portfolio has 27.7% overlap with SCHD. My portfolio has 24.02% overlap with DGRO.
15:20 Both ETFs offer value to my portfolio because there's not a ton of overlap.
15:36 Great expense ratios with both!
15:48 What do you think? Please share your thoughts in the comments section below!
16:03 SEGMENT 3: Top Holdings from SCHD vs. Top Holdings from DGRO
17:02 CONCLUSION: SCHD is the right one for me.
17:12 Check out the pinned comment for my Patreon.
18:40 DISCLOSURE AND DISCLAIMER
DISCLOSURE: I am long Hawaiian Electric (HE), Raytheon Technologies (RTX), AbbVie (ABBV), The Home Depot (HD), PepsiCo (PEP), Chevron (CVX), Johnson & Johnson (JNJ), Procter & Gamble (PG), Pfizer (PFE), and SCHD. I own these stocks in my personal dividend stock portfolio.
DISCLAIMER: All information and data on my YouTube Channel, blog, email newsletters, white papers, Excel files, and other materials is solely for informational purposes. I make no representations as to the accuracy, completeness, suitability or validity of any information. I will not be liable for any errors, omissions, losses, injuries or damages arising from its display or use. All information is provided AS IS with no warranties, and confers no rights. I will not be responsible for the accuracy of material that is linked on this site.
Because the information herein is based on my personal opinion and experience, it should not be considered professional financial investment advice or tax advice. The ideas and strategies that I provide should never be used without first assessing your own personal/financial situation, or without consulting a financial and/or tax professional. My thoughts and opinions may also change from time to time as I acquire more knowledge. These are, as discussed above, solely my thoughts and opinions. I reserve the right to delete any comments for any reason (abusive in nature, contain profanity, etc.). Your continued reading/use of my YouTube Channel, blog, email newsletters, whitepapers, Excel files, and other materials constitutes your agreement with and acceptance of this disclaimer.
COPYRIGHT: All PPC Ian videos, Excel files, guides, and other content are (c) Copyright IJL Productions LLC. PPC Ian is a registered trademark (tm) of IJL Productions LLC.