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Building a Reliable Dividend Portfolio

For those who focus on earning dividends, spreading your investments across a variety of companies is essential to avoid depending too heavily on just a few sources of income. However, selecting the right mix of stocks and determining allocation amounts can feel overwhelming.

Thankfully, there’s an efficient solution: purchasing the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). By investing in this ETF, you instantly gain exposure to 101 different companies, providing immediate diversification for your dividend strategy.

Let’s explore why this standout dividend ETF could be a long-term holding for your portfolio.

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A Dividend ETF That Minimizes Tech Exposure

Technology stocks are nearly impossible to ignore these days. The so-called "Magnificent Seven" have become so dominant that they now account for about one-third of the S&P 500, America’s most widely followed stock index.

In contrast, the Schwab U.S. Dividend Equity ETF offers a different approach, making it attractive for investors seeking less tech-heavy exposure. This fund tracks the Dow Jones U.S. Dividend 100™ Index and allocates just 8.2% of its holdings to technology companies.

Its largest positions feature well-established blue chip dividend payers such as Lockheed Martin, ConocoPhillips, Chevron, Verizon Communications, Bristol Myers Squibb, Altria Group, Coca-Cola, and PepsiCo. These industry leaders have a proven track record of consistent and growing dividend payments, often spanning decades.

At present, the Schwab U.S. Dividend Equity ETF offers a yield of approximately 3.4%, providing investors with a solid stream of dividend income from the outset.

How AI Trends Could Benefit Non-Tech Sectors

While artificial intelligence (AI) is generating excitement, it also brings new uncertainties. In just a few years, AI tools have evolved from advanced search engines to autonomous digital assistants, and recent volatility in software stocks highlights the disruptive nature of this technology.

On the other hand, this disruption could increase the appeal of non-technology companies, where AI may serve as a growth driver rather than a threat. For example, AI could accelerate automation, enable the development of humanoid robots, and assist pharmaceutical firms in drug discovery, among other possibilities.

The Schwab U.S. Dividend Equity ETF is heavily weighted toward sectors like energy, consumer staples, healthcare, and industrials—all of which stand to benefit as AI reshapes the global economy. This makes the ETF a smart way to balance your portfolio against tech-driven upheaval while continuing to collect dividends. Given these factors, it’s easy to see why this fund could be a strong candidate for a long-term, buy-and-hold investment.

Is Now the Time to Invest in the Schwab U.S. Dividend Equity ETF?

Before adding the Schwab U.S. Dividend Equity ETF to your portfolio, consider this:

• The Motley Fool Stock Advisor team recently revealed their picks for the 10 top stocks they believe offer the best opportunities right now—and the Schwab U.S. Dividend Equity ETF did not make the list. These selected stocks could deliver substantial returns in the years ahead.
• For instance, when Netflix was recommended on December 17, 2004, a $1,000 investment would now be worth $508,607*. Similarly, a $1,000 investment in Nvidia from April 15, 2005, would have grown to $1,122,746*.
• It’s worth highlighting that Stock Advisor has achieved an average return of 933%, far surpassing the S&P 500’s 188% over the same period. Don’t miss out on the latest top 10 recommendations—join Stock Advisor and become part of a community designed for individual investors.

*Stock Advisor performance as of March 14, 2026.