How Does SCHD Fare Vs. The SPY And Other Yield Plays?
Summary
- SCHD has large net overweights to the Energy (especially upstream O&G), Industrials, and Consumer Staples sectors vs the S&P500.
- SCHD's industrials overweight may not be favorable given contracting US Manufacturing PMI data.
- I don't like how SCHD has zero exposure to some of the SPY's Top 10 Magnificent 7 stocks I am bullish on; NVIDIA, Microsoft, and Amazon.
- SCHD's valuations are low and undemanding, and hence are a source of upside risk. But to contest this point, technical analysis of SCHD vs. SPX500 says the underperformance downtrend remains.
- So overall, I prefer the S&P500 over SCHD. And for yield-focused investors, I think there are higher-yielding alternatives such as Enbridge, Petrobras, and British American Tobacco; all of these beat SCHD's 3.87% dividend yield.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of VOO, BTI, NVDA, MSFT either through stock ownership, options, or other derivatives. 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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