Schwab's Dividend ETF Has Gained 25% This Year. Is It Still Worth Buying?

The Schwab U.S. Dividend Equity ETF (SCHD) has surged 25% in 2026, significantly outpacing the S&P 500's 13% gain. However, the fund's dividend payout has barely grown (only 1% year-over-year), with the gains driven primarily by price appreciation rather than increased dividends. The fund's yield has compressed from 3.8% to 3.1%, making it more expensive relative to its income. The analyst projects a more modest 7% annual return over the next five years, assuming dividend growth of 6% annually and a slight yield expansion to 3.4%.