This Schwab ETF Holds 100 Dividend Stocks, Charges $6 a Year, and Yields More Than Most Savings Accounts

By Austin Smith Published Mar 16, 9:00AM EDT

Quick Read

Schwab US Dividend Equity ETF (SCHD) charges just 0.06% annually ($6 per $10,000), yielding 3.39% and returning 12.29% year to date and 225.89% over ten years. Top holdings include Lockheed Martin (LMT) at 4.9% with $75.05B in FY2025 revenue and a $194B backlog, Verizon (VZ) at 4.49% yielding 5.4%, ConocoPhillips (COP) at 4.48% raising its quarterly dividend to $0.84, Chevron (CVX) at 4.42% marking its 39th consecutive annual dividend increase, Bristol Myers Squibb (BMY) with 94 years of consecutive dividend payments, Merck (MRK) paying $0.85 quarterly, and Coca-Cola (KO) extending a 63-year streak of dividend increases after raising its quarterly payout to $0.53.
SCHD’s 12% annualized dividend growth rate compounds significantly over time, delivering total returns that exceed fixed-rate savings accounts while maintaining exposure to dividend aristocrats across energy, consumer staples, and healthcare sectors.

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This Schwab ETF Holds 100 Dividend Stocks, Charges $6 a Year, and Yields More Than Most Savings Accounts — © Ilyas nasrulloh / Shutterstock.com

Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD | SCHD Price Prediction) costs $6 a year on a $10,000 investment, holds 100 dividend stocks, and currently yields 3.39%. With the Fed funds rate sitting at 3.75% and most high-yield savings accounts paying in that same neighborhood, the yield gap is narrow. But SCHD adds something a savings account never will: price appreciation. The fund is up 12.29% year to date and 17.28% over the past year. Over ten years, shares have returned 225.89%.

For context, the average mutual fund charges 0.44%, or $44 per year on $10,000. An advisor-managed portfolio typically runs 1%, or $100 per year. SCHD’s 0.06% expense ratio leaves almost every dollar working in the portfolio rather than covering fees.

What the Fund Actually Owns

The top ten holdings account for roughly 40% of the portfolio, and they read like a dividend investor’s wish list. Lockheed Martin (NYSE:LMT) leads at 4.9% of assets. The defense contractor posted FY2025 revenue of $75.05 billion and carries a $194 billion backlog. Its quarterly dividend now stands at $3.45 per share, up from $3.30 throughout 2025.

Verizon (NYSE:VZ) at 4.49% yields 5.4% on its own, paying $0.69 per quarter. ConocoPhillips (NYSE:COP) at 4.48% raised its ordinary dividend to $0.84 per quarter in early 2026 and plans to return 45% of cash from operations to shareholders this year. Chevron (NYSE:CVX) at 4.42% just marked its 39th consecutive annual dividend increase, now paying $1.78 per quarter.

The healthcare names add stability. Bristol Myers Squibb (NYSE:BMY) has paid dividends for 94 consecutive years. Merck (NYSE:MRK) pays $0.85 per quarter. Coca-Cola (NYSE:KO) just raised its quarterly payout to $0.53, extending a streak of 63 consecutive years of dividend increases.

Sector allocation tilts toward income. Energy represents 22.7% of the fund, consumer staples 18.6%, and healthcare 15.7%. Utilities and real estate, the two sectors most sensitive to rising rates, have zero weight.

The Total Return Case

SCHD’s 10-year dividend growth rate runs roughly 12% annually. That compounding matters: a dollar of income today becomes meaningfully larger over a decade without the investor doing anything. Add a 3.39% starting yield to that growth rate and the total return proposition pulls well ahead of a savings account that pays a fixed rate and offers no appreciation. The S&P 500, by comparison, is down 2.88% year to date while SCHD has gained over 12% in the same stretch.

The fund launched in October 2011 and now holds $85.9 billion in net assets. Portfolio turnover runs at just 30%, reflecting a genuine buy-and-hold approach to dividend quality rather than active rotation.

About the Author Austin Smith →

Austin Smith is a financial publisher with over two decades of experience in the markets. He spent over a decade at The Motley Fool as a senior editor for Fool.com, portfolio advisor for Millionacres, and launched new brands in the personal finance and real estate investing space.

His work has been featured on Fool.com, NPR, CNBC, USA Today, Yahoo Finance, MSN, AOL, Marketwatch, and many other publications. Today he writes for 24/7 Wall St and covers equities, REITs, and ETFs for readers. He is as an advisor to private companies, and co-hosts The AI Investor Podcast.

When not looking for investment opportunities, he can be found skiing, running, or playing soccer with his children. Learn more about me here.