SCHD and VIG 10-year returns are the headline comparison, but SCHD’s income story starts with a different number: six dividend growers now make up about 14.1% of the fund. The Schwab U.S. Dividend Equity ETF yields about 3.8% and charges a 0.06% expense ratio, so the payout rests on a narrow group of large positions rather than a broad spread of contributors.
That concentration is visible in the fund’s structure. SCHD tracks the Dow Jones U.S. Dividend 100 Index and reconstitutes every March, a process that can push out dividend payers before weak coverage lingers in the portfolio. As of May 31, 2026, the ETF held $94.9 billion in net assets, its largest position was about 6.7% of the fund, and the top 10 holdings made up roughly 43.6%.
Chevron, ADP, and ABT
Chevron represented 3.8% of SCHD assets and yielded 3.2%. It raised its quarterly dividend to $1.78 in 2026 after a 2025 increase that marked 38 years of growth. The company also reported second-quarter free cash flow of $18.10 billion and paid down $8.41 billion of debt in the second quarter, with its $7.12 annualized dividend equal to about 69% of trailing EPS of $10.39.
Automatic Data Processing and Abbott Laboratories add a second layer of support. ADP made up 2.2% of SCHD and yielded 2.6% after lifting its quarterly dividend to $1.70 in November 2025, its 51st consecutive annual increase. Its $6.80 annualized payout used about 61% of fiscal 2026 EPS of $11.12, and management guided for fiscal 2027 adjusted EPS growth of 9% to 11%. Abbott Laboratories accounted for 3.0% of the fund and yielded 2.5%; its $0.63 quarterly payout marked its 54th consecutive year of dividend increases and its 410th consecutive quarterly dividend.
KMB and Philip Morris
Kimberly-Clark is the pressure point in the group. Its trailing GAAP EPS of $5.07 barely covered the $5.08 paid out, leaving almost no cushion if earnings weaken further. Philip Morris still carried a 6.2% yield even with 3.2% volume declines, which shows the payout profile is holding up even as operating trends differ sharply across the largest names.
For SCHD holders, the practical takeaway is simple: the fund’s income depends on whether these big dividend growers keep growing faster than the stress points among them. March reconstitution is the mechanism that can reset that mix, and the next cycle will matter most for investors watching whether the fund keeps its income edge without leaning too hard on a few oversized positions. How SCHD and VIG 10-year returns compare is not provided in the supplied figures, so the cleaner read is the income engine itself: strong, concentrated, and still sensitive to dividend coverage at the margin.
