SCHD vs VYM: Dividend Comparison
Dividend data as of
Schwab US Dividend Equity ETF (SCHD) and Vanguard High Dividend Yield ETF (VYM) are both in the ETF sector, making them natural rivals for dividend investors. SCHD offers a significantly higher 3.51% yield compared to VYM's 2.33%, a gap of 1.18%. For dividend growth, SCHD leads with a 5-year CAGR of 8.7% versus VYM's 3.1%. Both are classified as Dividend Contenders.
Verdict
Yield Analysis
SCHD yields 1.18% more than VYM. In dollar terms, SCHD pays $1.05/share vs VYM's $3.50/share annually.
Dividend Growth
SCHD: Dividend growth has been steady, with a 3-year CAGR of 8.7% and a 5-year CAGR of 8.7% (10-year: 10.7%).
VYM: Dividend growth is slowing — the 3-year CAGR of 0.3% trails the 5-year rate of 3.1% and the 10-year rate of 5.3%.
Dividend Safety
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in SCHD vs VYM today?
At $31.61 per share, $10,000 buys about 316.4 shares of Schwab US Dividend Equity ETF (SCHD). Each share pays $1.05 per year in dividends, so the position starts out generating roughly $331 per year — about $28 a month.
At $155.43 per share, $10,000 buys about 64.3 shares of Vanguard High Dividend Yield ETF (VYM). Each share pays $3.50 per year in dividends, so the position starts out generating roughly $225 per year — about $19 a month.
SCHD is the larger income stream from day one: $106 per year more on the same $10,000 invested.
What could $10,000 of SCHD or VYM income look like in 10 years?
Schwab US Dividend Equity ETF (SCHD) has raised its dividend about 8.7% a year over the past five years. If that pace held, the $351 per year that $10,000 generates today at the current 3.51% yield would reach $808 per year by 2036 — a 8.1% yield on the original cost.
Vanguard High Dividend Yield ETF (VYM) has raised its dividend about 3.1% a year over the past five years. If that pace held, the $233 per year that $10,000 generates today at the current 2.33% yield would reach $317 per year by 2036 — a 3.2% yield on the original cost.
On those trailing rates, SCHD pays more in 2036: $808 versus $317 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would VYM's dividend growth overtake SCHD's higher yield?
It doesn't, on the trailing numbers. Schwab US Dividend Equity ETF (SCHD) yields more today (3.51% vs 2.33%) and has also grown its dividend at least as fast (8.7% vs 3.1% a year over five years). Unless VYM accelerates its raises or SCHD stumbles, VYM never closes the income gap — SCHD wins on both current income and growth.
Why is there no payout ratio for SCHD or VYM?
REWD has neither an earnings-per-share figure nor a payout ratio for Schwab US Dividend Equity ETF (SCHD) and Vanguard High Dividend Yield ETF (VYM) — typical for ETFs and covered-call funds, whose distributions are funded by the underlying portfolio (stock dividends, option premium, or return of capital) rather than a single company's earnings. For a fund, judge sustainability by the distribution history and the strategy behind it, not a payout ratio.
Which fits an early-retirement income portfolio better, SCHD or VYM?
For income you need right now, Schwab US Dividend Equity ETF (SCHD) leads: $100,000 invested today pays about $293 a month at the current 3.51% yield, versus $194 a month from Vanguard High Dividend Yield ETF (VYM) at 2.33%.
SCHD also leads on dividend growth (8.7% vs 3.1% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: SCHD has raised its dividend 14 consecutive years; VYM has raised its dividend 15 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $1,141/yr in SCHD vs $399/yr in VYM by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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