I'm excited to compare two favorite dividend stock ETFs, SCHD and DGRO. Learn about my favorite choice for my personal situation (SCHD), and how I'm now incorporating an ETF component in my individual dividend stock portfolio.
#dividend #stock #investing

Timestamps:
0:00 Introduction: I'm now a serious dividend stock ETF investor. I used to be only about individual dividend stocks. Now, my portfolio will morph to 70% individual positions and 30% ETF(s), mostly SCHD.
1:13 SEGMENT 1: My Story Has Changed, here's why I love ETFs for my own situation right now.
1:19 REASON 1: Single company risk is higher than ever before (ETFs offer immediate portfolio diversification)
1:56 REASON 2: My life has been more complex (ETFs make investing and life easier)
2:41 REASON 3: It's difficult to beat the total returns of SCHD and DGRO dividend ETFs. They are both at 11%+ annualized over the last 5 years.
3:10 My strategy will be a blend of individual stocks and ETFs.
3:33 SEGMENT 2: Comparing SCHD vs. DGRO
3:59 Very high level overview: How SCHD and DGRO compare
4:16 SCHD is more of a value-oriented index.
4:30 SCHD has a sweet spot dividend yield that aligns with my portfolio-wide target.
4:47 DGRO has a lower starting yield, but invests in companies on a quicker growth trajectory.
5:51 Both ETFs are doing well, they are not far off their 52-week highs. DGRO is only 2.6% off 52-week high.
6:30 Sometimes when an individual stock plummets, it's cause for concern (HE example). Sometimes when an individual stock corrects, it's a value buying opportunity (RTX example).
7:41 SCHD is more value-oriented. The PE is 13.87. By contrast, DGRO has a PE of 16.94, indicative of faster-growing companies.
8:08 SCHD has a solid 3.49% dividend yield. DGRO has a starting yield of 2.36% (it has fast dividend growers with lower payout ratios).
8:32 I use distributions from SCHD to help pay bills now.
9:07 I like SCHD because it chooses some positions I would not naturally select.
9:56 Surprise: SCHD has a faster dividend growth rate than DGRO. SCHD is at 13.9% 5-year CAGR, DGRO is at 10.6% 5-year CAGR.
10:23 I do think DGRO will have faster dividend CAGR going into the future.
10:44 SCHD has double the market cap of DGRO. Although DGRO is newer.
11:58 Over the last 5 years, both funds perform very well, in excess of 11% total returns. (SCHD slightly wins.)
12:55 With 11% annualized per year, with reasonable conservative dividend-oriented ETFs, I'm impressed. And, would be hard-pressed to beat these numbers.
13:48 SCHD has only 104 holdings. DGRO has a huge 428 holdings. For me, 428 feels heavy to me.
14:23 My portfolio has 27.7% overlap with SCHD. My portfolio has 24.02% overlap with DGRO.
15:20 Both ETFs offer value to my portfolio because there's not a ton of overlap.
15:36 Great expense ratios with both!
15:48 What do you think? Please share your thoughts in the comments section below!
16:03 SEGMENT 3: Top Holdings from SCHD vs. Top Holdings from DGRO
17:02 CONCLUSION: SCHD is the right one for me.
17:12 Check out the pinned comment for my Patreon.
18:40 DISCLOSURE AND DISCLAIMER

DISCLOSURE: I am long Hawaiian Electric (HE), Raytheon Technologies (RTX), AbbVie (ABBV), The Home Depot (HD), PepsiCo (PEP), Chevron (CVX), Johnson & Johnson (JNJ), Procter & Gamble (PG), Pfizer (PFE), and SCHD. I own these stocks in my personal dividend stock portfolio.

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