Is schd a good growth stock

``` The deep research logic is organized as follows: Okay, let's tackle this question: "Is SCHD a good growth stock?" First, I need to understand what the user is asking. SCHD is an ETF, not a single stock, so the question is a bit tricky. The user is asking if it's a good growth stock, but ETFs are baskets of stocks. However, the user might be referring to whether SCHD is a good investment for growth-oriented investors. Looking at the references provided, SCHD tracks the Dow Jones U.S. Dividend 100 Index. The index focuses on companies with a history of increasing dividends for at least 10 consecutive years. These are typically stable, established companies, which might not be the fastest-growing in terms of revenue or earnings. However, the ETF itself has shown some growth metrics. From the data, SCHD's 3-year net income CAGR is -61.35%, which is negative. That's a red flag for growth. Revenue CAGR is -1.63%, also negative. Diluted EPS CAGR is -58.02%, again negative. These metrics suggest that the underlying companies in SCHD aren't growing their profits or revenues in the short term. However, the ETF's total return CAGR over 3 years is 7.65%, which is positive. This discrepancy might be due to the ETF's focus on dividends and capital appreciation from the underlying stocks. The user profile mentions they're interested in short-term trading opportunities and stocks with potential for immediate price increases. SCHD's recent performance shows a 2.08% increase in closing price, which is positive, but the 3-year CAGR of 7.65% is moderate. The P/E ratio is 25.6, which is higher than the market average, indicating higher expectations for future earnings growth. However, the negative CAGRs for net income and revenue might not align with the user's short-term growth goals. The sector breakdown shows a heavy weighting in Energy (20.28%) and Consumer Defensive (19.35%). Energy stocks can be volatile, especially with recent geopolitical tensions mentioned in the articles. This could lead to short-term price swings, which might interest the user. However, the negative growth metrics in the underlying companies might not support sustained growth. The user also asked about technical indicators and potential breakouts. SCHD's recent price action and the sector shifts (increased energy exposure) could be factors. The ETF's expense ratio is low (0.06%), which is a plus, but the user is more focused on short-term gains rather than long-term holding costs. In conclusion, while SCHD offers a stable dividend income and some capital appreciation, the negative growth metrics in its underlying companies might not make it the best choice for a short-term growth-focused investor. The user might be better suited looking at ETFs with higher exposure to growth sectors like technology or those with positive revenue and earnings growth trends. ``` ### **Conclusion** **SCHD (Schwab U.S. Dividend Equity ETF)** is **not a traditional growth stock** but rather a **dividend-focused ETF** designed for income generation and moderate long-term capital appreciation. While it offers **stability and predictable cash flow** through its portfolio of high-quality, dividend-paying companies, its **short-term growth potential** is limited by its focus on dividend sustainability over rapid revenue or earnings growth. --- ### **Analysis** #### **1. SCHD’s Core Strategy** SCHD tracks the **Dow Jones U.S. Dividend 100 Index**, which screens for companies with: - **10+ years of consecutive dividend increases** . - **Strong financial health** (e.g., cash flow, return on equity). This focus on **dividend reliability** makes SCHD ideal for **income investors**, but less suited for those seeking **high growth**. #### **2. Growth Metrics** | Metric | SCHD (3-Year CAGR) | Implication | |----------------------------|----------------------|------------------------------------------------------------------------------| | **Net Income** | -61.35% | **Negative growth** due to sector-specific challenges (e.g., energy, financials). | | **Revenue** | -1.63% | Minimal growth, reflecting SCHD’s focus on stable, mature companies. | | **Diluted EPS** | -58.02% | Earnings contraction aligns with the ETF’s dividend-centric strategy. | | **Total Return** | 7.65% | Moderate long-term growth, driven by **dividend reinvestment** and price appreciation. | #### **3. Sector Breakdown** SCHD’s **top sectors** (as of 2025) include: - **Energy (20.28%)** - **Consumer Defensive (19.35%)** - **Healthcare (14.76%)** These sectors are **low-growth, high-yield** by nature, limiting SCHD’s ability to deliver **rapid price appreciation**. #### **4. Valuation** | Metric | SCHD (2025) | Comparison | |----------------------------|----------------------|------------------------------------------------------------------------------| | **P/E Ratio** | 25.6 | **Above market average**, reflecting high expectations for dividend growth. | | **P/S Ratio** | 0.37 | **Undervalued** relative to revenue, but not a growth indicator. | | **P/B Ratio** | 0.51 | **Significantly undervalued**, but tied to SCHD’s focus on stable assets. | #### **5. Recent Performance** - **Closing Price**: $27.05 (2.08% increase) . - **Year-to-Date Return**: 3.9% . - **3-Year CAGR**: 7.65% . --- ### **Why SCHD Might Not Be Ideal for Growth Investors** 1. **Focus on Dividends**: SCHD prioritizes **income stability** over **capital gains**, making it less attractive for short-term traders. 2. **Negative Growth Metrics**: Underlying companies show **declining net income** and **revenue stagnation** . 3. **Sector Limitations**: Heavy exposure to **low-growth sectors** (e.g., energy, consumer defensive) limits upside potential. --- ### **Conclusion** For **short-term traders** or **growth-focused investors**, SCHD is **not the best choice**. Its **dividend-centric strategy** and **moderate growth profile** make it more suitable for **income-focused portfolios**. If you’re looking for **high-growth ETFs**, consider alternatives like **VIG** (Vanguard Dividend Appreciation ETF) or **DGRW** (WisdomTree U.S. Quality Dividend Growth Fund), which balance **dividend growth** with **capital appreciation**. |code|Ticker|Name|Date|Closing Price|market_code| |---|---|---|---|---|---| |SCHD|SCHD.P|Schwab U.S. Dividend Equity ETF|20250701|27.05|169|