1 No-Brainer Dividend ETF to Buy Right Now for Less Than $1,000

Core Viewpoint - The Schwab U.S. Dividend Equity ETF (SCHD) is highlighted as a high-quality dividend ETF that offers a combination of guaranteed income and diversification, making it a less risky investment compared to individual stocks [1][2][3]. Group 1: ETF Characteristics - SCHD mirrors the Dow Jones U.S. Dividend 100 index and includes companies with at least 10 consecutive years of dividend payouts, a healthy balance sheet, and solid cash flow [3]. - The ETF consists of a diverse portfolio primarily made up of large-cap stocks, with 58% of its companies having a market cap exceeding $70 billion [3]. Group 2: Sector Allocation - The ETF's sector allocation includes: - Energy (19.34%): Chevron and ConocoPhillips - Consumer staples (18.50%): Coca-Cola and PepsiCo - Health care (16.10%): AbbVie and Merck - Industrials (12.28%): Lockheed Martin and United Parcel Service - Financials (9.37%): Fifth Third Bancorp and T. Rowe Price [4]. Group 3: Performance Metrics - SCHD currently has a dividend yield of 3.8%, which is three times higher than the S&P 500 average and slightly above its five-year average [5][7]. - Over the past decade, SCHD has averaged total annual returns of 11.3%, indicating strong long-term growth potential [10]. Group 4: Investment Strategy - Investing $1,000 in SCHD at a 3.8% yield would yield $38 annually, with the potential for significant growth through reinvestment of dividends [8][9]. - Utilizing a dividend reinvestment plan (DRIP) can enhance the compounding effect of earnings, making SCHD a compelling long-term investment option [12].