Around March each year the popular SCHD dividend stock goes through a reconstitution. Basically it kicks some stocks out and adds new companies to the portfolio.
The Schwab US Dividend Equity ETF seeks to track the Dow Jones U.S. Dividend 100™ Index. At the time of posting this article the SCHD ETF has a dividend yield of about 3.6%.
Stocks are re-weighted quarterly where percentages are rebalanced but the annual reconstitution is where some companies will get the chop. It’s always interesting to see as individual companies you like might be sold off while some you don’t like might be added. With the company changes it can also alter the sector weightings which may or may not be to your liking.
It generally creates a bit of drama on social media as we all run around claiming the end of SCHD or SCHD is the greatest dividend ETF ever created. It’s all fun and games for the armchair pundits online.
For example, I don’t like Verizon (VZ) but it’s currently the third largest holding with 4.05% held in SCHD. The reality is that if I held $1,000 worth of the ETF I would own about $40 worth of Verizon which isn’t such a big deal. Companies come and go with SCHD but the methodology remains and that’s why we should consider investing in it.
The goal of the reconstitution is to keep the dividend train rolling forward. People hold SCHD because of the strong track record of increasing dividends year after year. While there are plenty of other ETFs out there paying more than a 3.6% dividend yield there are far fewer with a track record of continually increasing dividends every year like SCHD.
New SCHD Numbers Versus Old
Schwab says that the dividend yield before the 2025 reconstitution was 3.93% and after it is 3.80%. That’ll get the dividend queens frothing at the mouth, but long term income investors will be happy with the dividend growth increase from 7.93% to 8.35%. It’s this dividend growth that keeps me interested in the SCHD ETF.
The 2025 reconstitution kicked out 17 companies and added 20 new companies to the portfolio. A couple additions of note include the energy stock ConocoPhillips (COP) and the healthcare stock Merck& Co Inc (MRK), both of which were added as top 10 holdings.
Pre-constitution top 10 holding stocks to get the boot were the healthcare stock Pfizer (PFE) and financials stock BlackRock (BLK).
$SCHD Top 10 Holdings in March 2025
| Symbol | Name | Percent of Assets (%) | Market Value |
|---|---|---|---|
| COP | CONOCOPHILLIPS | 4.60% | $3.2B |
| CVX | CHEVRON CORP | 4.39% | $3.1B |
| VZ | VERIZON COMMUNICATIONS INC | 4.05% | $2.8B |
| BMY | BRISTOL MYERS SQUIBB | 3.95% | $2.8B |
| KO | COCA-COLA | 3.92% | $2.7B |
| AMGN | AMGEN INC | 3.87% | $2.7B |
| CSCO | CISCO SYSTEMS INC | 3.80% | $2.7B |
| ABBV | ABBVIE INC | 3.80% | $2.7B |
| MO | ALTRIA GROUP INC | 3.80% | $2.7B |
| PEP | PEPSICO INC | 3.77% | $2.6B |
New Companies Added to SCHD in 2025
- COP CONOCOPHILLIPS Energy (weight %) 4.60 (dividend yield %) 3.15
- MRK MERCK & CO INC Health Care (weight) 4.01 (dividend yield) 3.14
- SLB SCHLUMBERGER NV Energy (weight) 2.30 (dividend yield) 2.87
- TGT TARGET CORP Consumer Staples (weight) 1.90 (dividend yield) 3.32
- GIS GENERAL MILLS INC Consumer Staples (weight) 1.29 (dividend yield) 3.46
- ADM ARCHER DANIELS MIDLAND Consumer Staples (weight) 0.88 (dividend yield) 3.96
- HAL HALLIBURTON Energy (weight) 0.86 (dividend yield) 2.50
- OVV OVINTIV INC Energy (weight) 0.43 (dividend yield) 2.96
- AFG AMERICAN FINANCIAL GROUP INC Financials (weight) 0.36 (dividend yield) 2.14
- ALV AUTOLIV INC Consumer Discretionary (weight) 0.26 (dividend yield) 2.92
- FMC FMC CORP Materials (weight) 0.21 (dividend yield) 4.77
- MC MOELIS CLASS A A Financials (weight) 0.17 (dividend yield) 3.25
- MUR MURPHY OIL CORP Energy (weight) 0.15 (dividend yield) 3.97
- FLO FLOWERS FOODS INC Consumer Staples (weight) 0.14 (dividend yield) 4.62
- FHI FEDERATED HERMES INC CLASS B B Financials (weight) 0.12 (dividend yield) 2.94
- SIG SIGNET JEWELERS LTD Consumer Discretionary (weight) 0.10 (dividend yield) 2.00
- IPAR INTERPARFUMS INC Consumer Staples (weight) 0.08 (dividend yield) 2.28
- CNA CNA FINANCIAL CORP Financials (weight) 0.04 (dividend yield) 3.64
- EBF ENNIS INC Industrials (weight) 0.02 (dividend yield) 4.92
- THFF FIRST FINANCIAL CORPORATION CORP | Financials (weight) 0.02 (dividend yield) 4.03
Companies Removed from SCHD in 2025
- PFE PFIZER INC | Health Care (weight %) 4.30 (dividend yield %) 6.37
- BLK BLACKROCK INC | Financials (weight) 3.83 (dividend yield) 1.99
- USB US BANCORP | Financials (weight) 2.55 (dividend yield) 4.14
- MTB M&T BANK CORP | Financials (weight) 1.13 (dividend yield) 2.85
- HBAN HUNTINGTON BANCSHARES INC | Financials (weight) 0.83 (dividend yield) 3.81
- TPR TAPESTRY INC Consumer Discretionary (weight) 0.65 (dividend yield) 3.27
- KEY KEYCORP Financials (weight) 0.57 (dividend yield) 4.78
- CHRW CH ROBINSON WORLDWIDE INC Industrials (weight) 0.45 (dividend yield) 2.38
- DKS DICKS SPORTING INC Consumer Discretionary (weight) 0.44 (dividend yield) 1.85
- HRB H&R BLOCK INC Consumer Discretionary (weight) 0.28 (dividend yield) 2.30
- ZION ZIONS BANCORPORATION Financials (weight) 0.28 (dividend yield) 3.06
- SNV SYNOVUS FINANCIAL CORP Financials (weight) 0.26 (dividend yield) 2.97
- BOH BANK OF HAWAII CORP Financials (weight) 0.10 (dividend yield) 3.93
- LEG LEGGETT & PLATT INC Consumer Discretionary (weight) 0.04 (dividend yield) 6.35
- CBRL CRACKER BARREL OLD COUNTRY STORE I | Consumer Discretionary (weight) 0.04 (dividend yield) 9.87
- HFWA HERITAGE FINANCIAL CORP Financials (weight) 0.03 (dividend yield) 3.76
- GES GUESS INC Consumer Discretionary (weight) 0.01 (dividend yield) 4.92
What do you think of the changes made to the SCHD dividend growth ETF in the 2025 reconstitution? Enough to make you sell or buy more?
My plan for 2025 is to buy at least 5 new shares each month.
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