SCHD vs. NOBL: High Yield vs. Dividend Growth ETF Showdown

• The ProShares S&P 500 Dividend Aristocrats ETF (NOBL) is simply a classical dividend maturation strategy.

• The Schwab U.S. Dividend Equity ETF (SCHD) combines elements of dividend growth, dividend quality, and precocious yield.

• With the marketplace starting to rotate distant from tech, but the system inactive looking decent, the Schwab ETF looks amended positioned.

• 10 stocks we similar amended than Schwab U.S. Dividend Equity ETF ›

While some categories technically autumn nether the "dividend" umbrella, investing successful dividend maturation stocks and high-yield stocks tin nutrient precise antithetic results.

On 1 hand, semipermanent dividend growers thin to beryllium precise stable, mature companies that make coagulated currency flows but small growth. High-yielders, connected the different hand, are typically much cyclical successful quality and trust connected dense cash-flow procreation to enactment those bigger dividend payments.

With the system and the markets looking similar they're getting acceptable to shift, it's a bully clip to measure the outlook of the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD), a fashionable high-yield choice, and the ProShares S&P 500 Dividend Aristocrats ETF (NYSEMKT: NOBL), a standard-bearer of semipermanent dividend growth.

The Schwab U.S. Dividend Equity ETF is benchmarked to the Dow Jones U.S. Dividend 100 Index. It starts by identifying a beingness of stocks that person paid dividends for astatine slightest 10 consecutive years. From there, it considers respective cardinal metrics arsenic good arsenic dividend past to look for the champion combinations of dividend growth, fiscal health, and yield. The last portfolio is weighted by marketplace cap.

This money has underperformed for the past 3 years arsenic dividend payers fell retired of favour during the tech and artificial quality (AI) boom. The portfolio of stocks is inactive solid, but it apt needs an situation wherever defensive, cyclical, and/or worth stocks person a infinitesimal again. A 19% allocation to vigor stocks, 18% to user staples, and conscionable 8% to exertion bespeak however poorly the money has been positioned for the caller rally. But it does bespeak however it could crook astir if the existent marketplace rotation continues.

The ProShares S&P 500 Dividend Aristocrats ETF tracks the S&P 500 Dividend Aristocrats® Index. (The word Dividend Aristocrats® is simply a registered trademark of Standard & Poor’s Financial Services LLC.) It targets companies from the large scale that person grown their dividends annually for astatine slightest 25 consecutive years.

Most companies that person grown their dividends for this agelong aren't successful accelerated maturation mode anymore. They don't request to reinvest a immense chunk of their disposable superior backmost into the business. They've apt reached a mature signifier wherever they tin steadily reward shareholders. As such, this portfolio tends to beryllium filled with "boring" companies, including apical holdings Albemarle, Cardinal Health, and C.H. Robinson Worldwide.