The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is one of the most popular dividend stock ETFs in the marketplace today. Its 3.3% yield is a big reason why. It invests in high-quality dividend-paying stocks that have demonstrated a consistent ability to pay and grow their dividends over time.
That strategy has helped this fund increase its total annual dividend paid for 14 consecutive years since its 2011 inception.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Because of the higher yield, generating $1,000 a month in passive income isn’t out of the question, but it does require a rather sizable initial investment. Moreover, this fund pays distributions quarterly, so what you’d actually need to look for is $3,000 in quarterly dividends that you can then budget out to $1,000 monthly.
$1,000 per month in dividends translates to $12,000 per year. If we divide that total by the fund’s current 3.3% yield, the required investment comes out to roughly $364,000. At $33.29 per share as of market close on July 24, investors would need to buy just under 11,000 shares of the Schwab U.S. Dividend Equity ETF.
It’s worth noting that the distribution rates and quarterly payouts for ETFs fluctuate regularly. This example assumes a constant 3.3% yield. The amount needed for a $1,000 monthly dividend could be more or less as things change. Reinvesting the fund’s distributions can also help improve how much income the fund is able to generate in the future.
Should you buy stock 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 the 10 best stocks for 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 when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $377,990!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,269,518!*
Now, it’s worth noting Stock Advisor’s total average return is 896% — a market-crushing outperformance compared to 206% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
