To The Moon

$Schwab US Dividend Equity ETF(SCHD)$

Majority of us who own and hold the Schwab U.S. Dividend Equity ETF (ticker: SCHD), our primary goal isn’t necessarily to earn massive dividends right away or to see rapid short-term growth. Instead, the appeal of this ETF lies in its strong historical track record of consistent dividend growth. Over time, this has significantly increased the dividend income for long-term investors.

This is exactly why I personally own several thousand shares of SCHD as an investor. While the dividend payouts today may not be enormous, the long-term potential is what makes this ETF so compelling. A few years down the road—whether in 1, 3, 5, or 10 years—the income generated is likely to grow substantially.

In this articles, I'll walk you through what the next 40 dividend payouts—equivalent to 10 years of SCHD dividends—could look like under different scenarios. If you’re a long-term dividend investor, you’ll want to stick around because these numbers might just get you excited. To maximize your portfolio’s potential, tracking your dividend income consistently is crucial.

Before diving into the SCHD dividend calculation and what the future could look like for both myself and many of you, let’s quickly cover some basics for those who may not be familiar with this ETF. SCHD has been trading for about 13 years, and its objective is straightforward yet highly effective: to track, as closely as possible (before fees and expenses), the total return of the Dow Jones U.S. Dividend 100 Index.

SCHD Top 10 Holdings

This index consists of around 100 companies that have consistently paid dividends, provided a solid starting yield, and demonstrated reliable dividend growth over time. While SCHD’s top holdings may not be the most high-profile names in the market, the ETF’s performance speaks for itself. Since its inception, SCHD has delivered annualized returns of approximately 11–13%, making it a steady and dependable choice—not necessarily the fastest-growing ETF, but one that offers consistent dividend growth.

Dividend Yield

Now, let’s dive into SCHD’s current dividend yield, its historical growth rates, and projections for the future. These insights will be essential for anyone serious about forecasting their dividend income.

At its current level, SCHD has a trailing 12-month dividend yield of approximately 3.62%. This means for every $100 invested, you’re earning around $3–$4 in dividends per year. While there are other ETFs and stocks offering higher yields, what sets SCHD apart is its impressive dividend growth rate.

Over the past 12 months, SCHD’s dividend has grown by approximately 12.23%, meaning investors effectively received a 12% pay raise in dividend income compared to the previous year. Over the past 3 years, the growth rate has been nearly 10%, over 5 years it’s close to 12%, and when averaging out the last 10 years, SCHD has consistently grown its dividend by roughly 11% per year.

Growth

Of course, growth rates fluctuate—some years are better than others, and some quarters may even show slight declines. However, the long-term trend is clear: SCHD’s dividend income has continued to rise steadily.

For instance, on December 10, 2024, SCHD paid out a $0.26 dividend per share (adjusted for the stock split). This means every shareholder received a payout based on the number of shares they own.

Now, let’s break down SCHD’s future dividend potential and how this could impact your portfolio over time.

Valuation

If we go back about 10 years to December 2014, SCHD was paying around $0.09 per share for that quarter. Fast forward to today, and not only has the dividend doubled—it has nearly tripled. When you start accumulating hundreds or even thousands of shares over time, these dividend payouts can really add up.

Example if my portfolio, I currently hold around 2000 shares of SCHD across all my accounts and implement Dollar cost average (DCA) investment strategy where you invest a fixed amount of money at regular intervals, regardless of market conditions. This approach helps reduce the impact of market volatility and lowers the risk of making a large investment at the wrong time. By looking at SCHD’s trailing 12-month payout, the ETF has distributed approximately $0.99 per share over the past year.

Based on that payout, my annual dividend income from SCHD currently sits at around $2,291.85—or roughly $191 per month.

Now, here’s where things get interesting. The calculation allows me to model different dividend growth rates, ranging from 7% to 12%. While we can’t predict SCHD’s exact future growth, historical data suggests an average growth rate of around 11% per year. Of course, there’s always uncertainty—dividends could dip one year and spike the next—but assuming an 11% annual growth rate, here’s what my dividend income could look like over the next decade, even if I never buy another share:

• Right now, I’m earning around $2,300 per year in dividends—not bad, but nothing extreme.

• In just five years, that amount is projected to double—without me doing anything.

• By 2034, assuming the same 11% growth rate, SCHD’s annual dividend payout per share could approach $3 per share.

• This would bring my projected annual dividend income to over $6,500 per year, or approximately $540 per month.

One vluation I added to the calculation, just for fun, is a tracker that shows how much your monthly dividend income increases over time—all without lifting a finger. While there are certainly ETFs and stocks with higher yields, SCHD’s strength lies in its dividend growth. If this trend continues, the long-term compounding effect can be truly powerful.

This is why I often highlight Dividend Growth ETF such as SCHD in my articles as a great example of how an investor can allocate $25K, $50K, or $100K into a strong dividend-growth ETF at a young age, reinvest the dividends, and let time do the rest. The potential long-term results are staggering.

Even if you only own 100 shares today, historical growth trends suggest your dividend income will still grow significantly over time. And for those aiming to accumulate 1,000, 5,000, or even 10,000 shares, the compounding effect becomes even more impressive.

Conclusion

Now that we’ve had explored SCHD’s past performance and potential future growth, I want to hear from you. Do you currently own any SCHD across all your portfolios? Do you thing Dividend ETF still a good investment? Drop your answer in the comments below!

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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