SCHD, the Schwab U.S. Dividend Equity ETF, is a $110.6B fund (as of 10/8/2026) with a 0.06% expense ratio. It tracks the Dow Jones U.S. Dividend 100 Index, which is rebuilt every March. At each rebuild, stocks are scored on cash flow to debt, return on equity, dividend yield and five-year dividend growth. The cash-flow screen is about debt. It doesn't check how much of their cash companies pay out, so dividend coverage isn't something the index tests directly.
A reader asked us whether the companies paying SCHD's dividend cover it more comfortably today than they did a few years ago. They had been burned once already: a stock yielding around 10% (Conagra, CAG) later cut its dividend by half. Yield is what draws people in. Coverage, how much of its cash a company pays out, is one indicator of how much room it has to keep paying.
The short answer: yes, coverage is better. SCHD's top 30 holdings in 2022 paid out 59.9% of their free cash flow as dividends. Today's top 30 pay out 47.3%. The look-through dividend yield was 3.29% both times, so the income is the same and it's better covered.
SCHD's Income in Numbers
SCHD's latest distribution was $0.2665 per share (ex-dividend September 23, 2026). The fund pays quarterly. At the 10/19/2026 closing price of $34.24, that payment works out to an annualized run-rate of 3.11%.
Over the trailing 12 months (October 2025 through September 2026, four payments), SCHD paid $1.0541 per share, a trailing yield of 3.08%. The distributions change from quarter to quarter with the dividends the holdings pay, so these are recent actual payments, not a fixed rate.
Over the past year (10/17/2025 to 10/19/2026, Tiingo), SCHD's price rose 27.8% and its total return with distributions reinvested was 32.3%. Distributions grew far more slowly, up 2.0% from $1.0339 to $1.0541 per share, so the trailing yield fell from about 3.86% to 3.08%. The price ran ahead of the income, which is worth keeping in mind as you read the coverage numbers below.
Performance and yield figures are historical and may change. Total return includes price movement and distributions where available. Past performance does not guarantee future results. Yield is not the same as total return.
| Metric | SCHD |
| Price (10/19/2026 close) | $34.24 |
| 1-year total return (10/17/2025–10/19/2026) | 32.3% |
| 52-week range (closing prices) | $26.44 – $35.21 |
| Expense ratio | 0.06% |
| Total net assets | $110.6B (10/8/2026) |
| Latest quarterly distribution | $0.2665 (ex-date 9/23/2026) |
| Annualized run-rate | 3.11% |
| Trailing 12-month distributions | $1.0541 (3.08% trailing yield) |
How We Measured Coverage
We compared SCHD's 30 largest holdings at two dates. The first was May 31, 2022, after that year's March rebuild, when the top 30 were 80% of the fund. The second was October 8, 2026, when the top 30 were 87% of the fund.
For each company we measured the share of free cash flow paid out as dividends. Free cash flow means cash from operations minus what the company spends on plants and equipment. We compared fiscal 2022 with the latest 12 reported months (mostly through June 2026) and used fiscal 2019 as a pre-pandemic check. A few companies run on different calendars: PepsiCo's latest 12 months end September 5, 2026, its most recent quarter.
To get one number for the whole fund, each company counts by how much of SCHD's dividend it supplies (portfolio weight × dividend yield), not by weight alone. We left out banks, insurers and Blackstone, about 3% of the fund today and 5% in 2022, because free cash flow doesn't measure their capacity to pay dividends.
The Answer: Lower Payouts, Same Income
- Companies paying out more than 75% of their free cash flow supplied 46% of the basket's dividend in 2022. Today they supply 25%. PepsiCo sits right on that line at 75.3%; count it out and today's figure is 18%.
- The look-through dividend yield was 3.29% at both dates. That's above the fund's 3.08% trailing yield because it covers only the top 30 holdings, uses each company's last 12 months of dividends at 10/8 prices (SCHD's price rose about 3% from 10/8 to 10/19), and comes before the fund's fee and the lag between when companies pay and when SCHD distributes.
