The Schwab U.S. Dividend Equity ETF (SCHD) underwent its annual index reconstitution, resulting in 20 additions and 17 deletions. Notable changes include the removal of Pfizer and BlackRock, with ConocoPhillips becoming the new top holding. The total exposure to the Energy sector now exceeds 20%, raising concerns about dividend consistency. Despite a slight drop in yield, SCHD maintains its quality, value, and dividend growth advantages over other ETFs. However, weak sales and earnings growth, along with a high dividend payout ratio, highlight areas of concern. The reconstitution reinforces SCHD’s appeal as a long-term investment but suggests caution due to earnings growth and dividend safety issues. — news from Seeking Alpha
