Here's How Many Shares of the Schwab U.S. Dividend Equity ETF (SCHD) You'd Need for $500 in Yearly Dividends

Core Insights - The Schwab U.S. Dividend Equity ETF (SCHD) is a leading dividend-focused ETF, attracting income-oriented investors due to its appealing dividend yield [1][3]. Group 1: ETF Overview - The ETF tracks an index that selects top dividend stocks based on quality characteristics such as dividend yield and five-year dividend growth rate, holding 100 companies with high and steadily increasing dividends [3][8]. - Over the past 12 months, the ETF has distributed a cumulative dividend of $1.03 per share, resulting in a 3.8% annualized distribution yield at the current share price [4]. Group 2: Investment Requirements - To generate $500 in annual dividend income, an investor would need to own approximately 485 shares, costing over $13,225 at the recent share price of around $27.25, which is significantly lower than the investment required for a lower-yield fund like the S&P 500 index [5]. - The S&P 500 index fund would require an investment of over $43,110 to achieve the same $500 in dividend income, given its current yield of less than 1.2% [5]. Group 3: Growth Potential - The income stream from the Schwab U.S. Dividend Equity ETF is expected to grow steadily as the companies within the fund increase their dividend payments, with current holdings having grown dividends at an annual rate exceeding 8% over the past five years [6]. - The combination of a high current yield and solid dividend growth profile positions the ETF as a strong buy-and-hold option for income investors [6].