Key Takeaways
- SCHD’s 2025 dividend growth remains steady but slower, with trailing twelve month payouts up 8.65 percent and a yield near 3.8 percent.
- The ETF has underperformed major dividend peers in total return year to date, hurt by sector concentration and limited exposure to growth and REITs.
- SCHD remains a strong core income holding, but investors may benefit from pairing it with complementary dividend and covered call ETFs for better diversification.
The Schwab U.S. Dividend Equity ETF (SCHD) remains a cornerstone for dividend investors in 2025, offering reliable income and disciplined stock selection. However, while its dividends continue to climb, the pace of growth and its recent total return performance have lagged more aggressive income strategies.
SCHD Dividend Outlook Reliable But Slower Paced
As we move through the final quarter of 2025, SCHD’s dividend profile reflects stability rather than excitement. The fund has maintained its reputation for consistency, but without the rapid payout expansion seen in some competing income ETFs this year.
SCHD paid its most recent dividend of $0.26 per share in September 2025, matching its June payout and marking a 3.3 percent year over year increase. This reinforces its dependability for income investors, even if the growth rate appears modest compared with higher yielding or more aggressive products.
On a trailing twelve month basis, SCHD’s total distributed dividends reached $1.034 per share with the September payout. That represents an 8.65 percent increase versus the prior year, a respectable figure and broadly in line with its historical profile, though not at the top of the dividend ETF universe.
Key dividend statistics as of Q3 2025:
- TTM dividend: $1.034 per share
- TTM yield: 3.81 percent
- Forward yield: 3.83 percent
- Year over year dividend growth: 5.8 percent
Quarterly dividend payments in 2025 so far:
- March: $0.249 (down 6 percent from December 2024)
- June: $0.26 (up 4.4 percent quarter over quarter)
- September: $0.26 (flat quarter over quarter, up 3.3 percent year over year)
At an annualized rate of approximately $1.04 per share and a price near $27, SCHD is yielding close to 3.83 percent.
For investors using a DRIP strategy, this combination of moderate yield and consistent growth supports a compounding income profile, even if it lacks the highest headline yield in the market.
Income Strength But Weaker Total Returns In 2025
While SCHD’s income stream remains intact, its total return performance this year has been underwhelming. Through the third quarter of 2025, SCHD has delivered only about 0.9 percent year to date total return, trailing the S&P 500 and most major dividend oriented ETFs.
A key factor has been sector composition. SCHD leans heavily toward Consumer Staples and Financials and has relatively limited exposure to fast growing Technology names or Utilities that have benefited from recent market conditions. The fund also excludes certain high yielding segments, such as REITs, which have contributed meaningfully to income in other strategies.
Comparative performance snapshot year to date 2025:
- SCHD: +0.9 percent
- VIG (Dividend growth): +8.2 percent
- VYM (High dividend yield): +6.4 percent
- DIVO (Income with covered calls): +10.4 percent
- JEPI (High yield): +7.2 percent
For investors who prioritize both a growing income stream and competitive total returns, SCHD’s recent performance may feel like the slow lane. However, the underlying quality bias and dividend discipline still appeal to long term DRIP investors focused on gradual compounding rather than short term outperformance.
Role Of SCHD In Dividend And DRIP Portfolios
Despite its muted 2025 returns, SCHD continues to function effectively as a core position in income focused portfolios. The ETF’s rules based approach emphasizes high quality, dividend growing companies and has produced an average annual return of roughly 12.2 percent over the past decade, including both price appreciation and reinvested dividends.
Where 2025 has exposed a weakness is in concentration. SCHD’s tilt toward a limited range of sectors and its exclusion of REITs and other specialized income vehicles can leave investors underexposed to certain sources of yield and diversification. For those relying on SCHD as a single fund solution, this may mean missed opportunities in areas such as covered call strategies and international dividend payers.
By itself, SCHD provides a strong backbone for a DRIP strategy, steadily adding shares through reinvested payouts. But pairing it with complementary ETFs can enhance both income frequency and diversification without abandoning SCHD’s stability.
What Investors May Consider Doing With SCHD
For investors evaluating their next move with SCHD, the decision often comes down to objectives and time horizon.
- Maintain a core position if you are a long term, income focused investor prioritizing stability, quality and tax efficiency. SCHD’s dividends continue to grow, even if at a measured pace, and its low cost structure remains attractive.
- Add complementary income vehicles if SCHD is your primary or only dividend holding. Blending in REITs, covered call ETFs such as DIVO or JEPI, or international dividend funds like AVDV can provide higher yield potential, broader sector exposure and in some cases more frequent distributions.
- Temper expectations for near term outperformance as SCHD is not currently positioned to lead a growth driven or speculative rally. Its sweet spot remains steady income and gradual growth, not rapid capital gains.
In 2025, SCHD tells a story of reassurance over excitement. For many dividend investors, especially those nearing or in retirement or those committed to DRIP strategies, that trade off is acceptable. While it has not been a market beater this year, SCHD still offers consistent, relatively safe yield and a high quality portfolio that can serve as the bedrock of an income strategy, complemented by more opportunistic dividend plays around the edges.
