Wealthy PotDGRO vs SCHD: Dividend Growth vs High-Quality Yield
DGRO and SCHD are two of the most popular dividend ETFs, and both are cheap and well-built. But they chase dividends differently: SCHD screens for high, quality yield, while DGRO screens for a history of dividend growth. That produces a real gap in current income and a different risk profile. This guide uses figures pulled straight from the funds' own documents.
The Short Answer
- Want higher current dividend income and a value tilt? SCHD. It yields far more (~3.2% vs ~1.9%) from a concentrated 100-stock quality-and-yield screen.
- Want broader diversification and a dividend-growth focus with more total-return potential? DGRO. It holds ~390 stocks that consistently raise dividends, yields less today, but has edged SCHD on total return.
Both are excellent; the choice is income-now (SCHD) versus a broader, growth-leaning dividend fund (DGRO). Some investors hold both.
Two Different Dividend Strategies
- SCHD is the Schwab U.S. Dividend Equity ETF. It tracks the Dow Jones U.S. Dividend 100 Index, about 102 stocks selected for a combination of high yield and quality (metrics like return on equity and cash-flow-to-debt). The result is a higher-yielding, value-tilted, more concentrated fund.
- DGRO is the iShares Core Dividend Growth ETF. It tracks the Morningstar US Dividend Growth Index, about 390 stocks with a history of growing their dividends, a quality/growth screen rather than a yield screen. It's broader and yields less, but leans toward companies compounding their payouts.
DGRO vs SCHD Side by Side
| Feature | DGRO | SCHD |
|---|---|---|
| Fund | iShares Core Dividend Growth | Schwab U.S. Dividend Equity |
| Index tracked | Morningstar US Dividend Growth | Dow Jones U.S. Dividend 100 |
| Strategy | Dividend growth (quality) | High quality yield (value tilt) |
| Expense ratio | 0.08% | 0.06% |
| Number of holdings | ~390 | ~102 |
| SEC 30-day yield | ~1.95% | ~3.24% |
| 10-year return (avg annual, NAV) | 13.38% | 12.37% |
| Growth of $10,000 over those 10 years (hypothetical) | $35,100 | $32,080 |
| Inception | Jun 10, 2014 | Oct 20, 2011 |
Yield Now vs Growth Later
The headline difference is income: SCHD's ~3.2% SEC yield is well above DGRO's ~1.9%. If you're living off dividends, SCHD pays you more today. But DGRO's lower yield is by design, it favors companies reinvesting to grow future payouts, and over the past decade its total return (with dividends reinvested) has edged SCHD's.
The two also differ in shape. SCHD is more concentrated (~102 holdings) with a stronger value tilt, which can help in value-led markets and hurt when growth leads. DGRO's ~390 holdings and dividend-growth screen make it broader and a bit more growth-leaning. Neither has "won", they express different bets, and their trailing returns reflect which style led recently, not which is permanently better.
Which One Fits You
Choose SCHD if: you want maximum current dividend income, a value/quality tilt, and you're comfortable with a more concentrated 100-stock fund, common for retirees and income investors. Compare it to a broader high-yield option in VYM vs SCHD.
Choose DGRO if: you want a broader, dividend-growth fund with more holdings and a bit more total-return orientation, accepting a lower current yield. It pairs well as a diversified dividend core. Weighing dividends against the broad market instead? See SCHD vs VOO. Many investors hold both DGRO and SCHD for a blend of income and growth.
FAQ
Is DGRO or SCHD better?
They use different dividend strategies. SCHD screens for high, quality yield (~3.2%, ~102 stocks, value tilt); DGRO screens for dividend growth (~1.9% yield, ~390 stocks, broader). SCHD pays more income now; DGRO is more diversified and has edged SCHD on total return. Income investors often prefer SCHD; those wanting a broader dividend-growth fund prefer DGRO.
Why does SCHD yield more than DGRO?
SCHD's index selects for higher current yield among quality companies, while DGRO's index selects for a history of dividend growth regardless of current yield, so DGRO holds more lower-yielding compounders. That's why SCHD's ~3.2% SEC yield tops DGRO's ~1.9%.
Why has DGRO outperformed SCHD on total return?
DGRO's broader, more growth-leaning portfolio benefited from the recent strength in higher-growth quality names, lifting its total return (dividends reinvested) slightly above SCHD's over the past decade. Value-and-yield strategies like SCHD have led in other periods; past performance doesn't predict the future.
Can I hold both DGRO and SCHD?
Yes, and many dividend investors do, SCHD for higher current income and a value tilt, DGRO for broader diversification and dividend growth. They overlap on some large quality names, so expect meaningful (not total) overlap.
Related comparisons: VYM vs SCHD · SCHD vs VOO · JEPI vs JEPQ · All ETF comparisons
Primary sources: expense ratios, indexes, holdings, yields, and returns are from the issuers' official documents for DGRO (iShares) and SCHD (Schwab). Both 10-year returns as of Jun 30, 2026; DGRO SEC yield as of Aug 31, 2026; SCHD SEC yield as of Sep 10, 2026. For background, see the SEC's Investor.gov guide to mutual funds and ETFs.
This article is for educational purposes only and is not investment advice. Investing involves risk, including possible loss of principal, and past performance does not guarantee future results. Dividends are not guaranteed and can be cut. Expense ratios, yields, and holdings change over time; confirm current figures on the issuer's site before investing. Consult a qualified financial professional before making investment decisions.