The Schwab U.S. Dividend Equity ETF (SCHD) has faced a correction, prompting passive income investors to reevaluate their strategies as the S&P 500 continues to approach new highs. Despite SCHD's lower performance and a 10% dip since its last peak, it offers an attractive P/E ratio of 15.9 and a yield of 4%. While SCHD has seen a slower recovery compared to the S&P 500, it remains a potential buy for lower-risk, dividend-seeking investors anticipating market volatility in the latter half of the year. Comparatively, PepsiCo's stock drop highlights broader market risks for defensive dividend stocks unlike the diversified SCHD.
The recent correction in SCHD has many passive income investors pondering whether it's time to buy the dip or step back, given S&P 500's contrasting performance.
Though SCHD’s recovery since April has been less sharp than S&P 500's, its low P/E ratio and attractive yield present a compelling buying opportunity for investors.
PepsiCo's decline by 33% highlights that even defensive dividend stocks are vulnerable, but SCHD is a diversified basket of high-quality names, suggesting a different outlook.
Investors are comparing SCHD to the S&P 500, but the differences in yield and performance trajectory may impact their decisions while navigating upcoming market surprises.
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