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SCHD Update Post-Reconstitution: Why I'm Now Bullish On This Dividend Growth Powerhouse


  • SCHD reconstituted last month, resulting in some very favorable changes involving the Financials, Energy, and Health Care sectors.
  • I'll look at SCHD at the industry level, showing investors why it is well set up to continue its strong dividend growth track record.
  • I'll also highlight the top 20 holdings and some of the key indicators I believe are important for how they will perform as the economy continues to strengthen.
  • I'm upgrading my rating on SCHD from neutral to bullish, as most of the changes made put it in a better position to capture the upside of undervalued, high-potential stocks.

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Investment Thesis

In late March, the Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) reconstituted, resulting in some material changes that saw it decrease allocations to the Financials and Energy sectors in favor of Health

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Build sustainable portfolio income with premium dividend yields up to 10%.

I perform independent fundamental analysis for over 850 U.S. Equity ETFs and aim to provide you with the most comprehensive ETF coverage on Seeking Alpha. My insights into how ETFs are constructed at the industry level are unique rather than surface-level reviews that’s standard on other investment platforms. My deep-dive articles always include a set of alternative funds, and I am active in the comments section and ready to answer your questions about the ETFs you own or are considering.

My qualifications include a Certificate in Advanced Investment Advice from the Canadian Securities Institute, the completion of all educational requirements for the Chartered Investment Manager (CIM) designation, and a Bachelor of Commerce degree with a major in Accounting. In addition, I passed the CFA Level 1 Exam and am on track to become licensed to advise on options and derivatives in 2023. In November 2021, I became a contributor for the Hoya Capital Income Builder Marketplace Service and manage the "Active Equity ETF Model Portfolio", which as a total return objective. Sign up for a free trial today! Hoya Capital Income Builder.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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