Like Dividends? You Should Check Out This Wealth-Creating Income Investment
There's a lot to like about dividend stocks. While their main draw may be the income streams they provide, those payouts are not the only thing they offer to investors. Companies that pay dividends have, as a class, historically delivered market-beating total returns. The average dividend payer in the S 500 has delivered a 9.2% average annual total return over the last 50 years, according to Hartford Funds and Ned Davis Research. That compares to a 7.7% average annual total return for an equal-weighted S 500 index.
However, not all dividend stocks are equal. The best returns have come from companies that have been able to both sustain and regularly grow their payouts. Such businesses are the focus of the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). Its strategy has enabled the exchange-traded fund to grow its investors' assets impressively. Had a person invested $10,000 in the ETF at its inception in October 2011 and consistently reinvested their dividends, their holding would be worth about $42,000 today. Here's a closer look at this top-notch dividend-focused ETF.
The Schwab U.S. Dividend Equity ETF is a passively managed fund. It tracks the Dow Jones U.S. Dividend 100 index, which measures the performance of roughly 100 high-yielding dividend stocks with records of consistently paying dividends. The index also zeroes in on those with peer-leading financial metrics.
Source Fool.com
