SCHD vs DGRO: Which Dividend Growth ETF Is Right for You?
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Full bio →SCHD and DGRO are both dividend growth ETFs, but they differ meaningfully in yield, growth rate, sector exposure, and underlying methodology. Understanding the differences helps you choose which fits your income timeline and risk tolerance — or whether holding both makes sense.
Use the SCHD dividend calculator to model income projections for SCHD specifically.
Quick Comparison
| Metric | SCHD | DGRO |
|---|---|---|
| Issuer | Schwab | iShares (BlackRock) |
| Expense ratio | 0.06% | 0.08% |
| Current dividend yield | ~3.5% | ~2.3% |
| 5-year dividend growth CAGR | ~11–12% | ~9–10% |
| 10-year total return | ~12.9% annualised | ~13.3% annualised |
| Holdings | ~100 | ~430 |
| Dividend consistency requirement | 10+ consecutive years | 5+ consecutive years |
| Index | Dow Jones U.S. Dividend 100™ | Morningstar US Dividend Growth Index |
Dividend Yield: SCHD Wins Clearly
SCHD yields roughly 3.3–3.8% — DGRO yields roughly 2.1–2.5%. On a $100,000 investment:
| Investment | SCHD income/year (3.5%) | DGRO income/year (2.3%) |
|---|---|---|
| $50,000 | $1,750 | $1,150 |
| $100,000 | $3,500 | $2,300 |
| $250,000 | $8,750 | $5,750 |
| $500,000 | $17,500 | $11,500 |
For investors who need current income — retirees, those building passive income — SCHD generates meaningfully more cash today.
Dividend Growth: SCHD Has the Edge
SCHD’s 5-year dividend CAGR of ~11–12% exceeds DGRO’s ~9–10%. Both compound well over time. Projected annual dividend on a $100,000 initial investment (no new contributions):
| Year | SCHD dividend (11% growth) | DGRO dividend (9.5% growth) |
|---|---|---|
| Year 1 | $3,500 | $2,300 |
| Year 5 | $5,793 | $3,643 |
| Year 10 | $9,892 | $5,778 |
| Year 20 | $27,840 | $14,531 |
SCHD’s combination of higher starting yield and higher growth rate compounds into a large income gap over 10–20 years.
Total Return: DGRO Has a Slight Edge
Paradoxically, DGRO’s lower-yield approach has produced marginally higher total return (price appreciation + dividends) over the past decade — ~13.3% annualised vs SCHD’s ~12.9%. The difference is small but consistent: DGRO holds more growth-oriented dividend payers that appreciate faster in price.
For investors focused on total wealth accumulation (not current income), DGRO’s slight total return edge may matter more than SCHD’s income advantage.
Holdings and Diversification
| Metric | SCHD | DGRO |
|---|---|---|
| Number of holdings | ~100 | ~430 |
| Concentration (top 10) | ~40% | ~25% |
| Technology exposure | Low (~11%) | Higher (~20%) |
| Dividend track record required | 10+ years | 5+ years |
DGRO’s 430+ holdings give broader diversification and more Technology exposure (including companies that started dividends more recently). SCHD’s stricter 10-year requirement and higher concentration mean larger bets on proven dividend payers.
Sector Differences
| Sector | SCHD | DGRO |
|---|---|---|
| Financials | ~17% | ~20% |
| Health Care | ~15% | ~18% |
| Consumer Staples | ~14% | ~10% |
| Technology | ~11% | ~20% |
| Energy | ~13% | ~5% |
| Industrials | ~12% | ~14% |
DGRO’s higher tech weighting is a key driver of its marginally better total return — tech dividend payers (Microsoft, Apple, Broadcom) have appreciated significantly. SCHD’s higher Energy and Consumer Staples weighting provides more inflation resilience and stable income.
Which Should You Choose?
Choose SCHD if:
- You want maximum current dividend income
- You are at or near retirement and need cash flow now
- You prefer a stricter quality screen (10-year dividend track record)
- You want higher dividend growth compounding income over 20+ years
Choose DGRO if:
- You prioritise total return over current income
- You want more Technology exposure
- You have a longer time horizon before needing income (10+ years)
- You prefer broader diversification (430 vs 100 holdings)
Hold both if:
- You want diversified dividend exposure across quality tiers
- You’re in accumulation phase and want income + growth balance
- SCHD provides the income floor; DGRO provides tech-driven appreciation
For a broader comparison including JEPI, see SCHD vs VYM vs JEPI. Review SCHD’s holdings and methodology to understand why SCHD’s tech underweight exists by design.