Best Dividend ETFs for 2026: SCHD vs VYM vs DGRO Compared

Not everyone has the time or interest to research individual dividend stocks. That's where dividend ETFs come in—they offer instant diversification across dozens or hundreds of dividend-paying companies with a single purchase.

In this guide, we'll compare three of the most popular dividend ETFs: SCHD, VYM, and DGRO.

Quick Comparison Table

| Feature | SCHD | VYM | DGRO | |---------|------|-----|------| | Expense Ratio | 0.06% | 0.06% | 0.08% | | Dividend Yield | ~3.5% | ~3.0% | ~2.3% | | Holdings | ~100 | ~450 | ~420 | | Focus | Quality + Yield | High Yield | Dividend Growth | | 5-Year Return | ~12% | ~10% | ~11% |

SCHD: The Quality Champion

Schwab U.S. Dividend Equity ETF has become the darling of the dividend investing community, and for good reason.

Strengths

• Focuses on quality metrics, not just yield
• Strong fundamental screening (ROE, cash flow, dividend growth)
• Excellent 5-year track record
• Low expense ratio (0.06%)

Weaknesses

• Concentrated in ~100 stocks
• Heavy tech and financial exposure
• Less diversification than alternatives

Best For

Investors who want a balance of current income and dividend growth with a quality tilt.

VYM: The Income Maximizer

Vanguard High Dividend Yield ETF takes a straightforward approach: buy stocks with above-average dividend yields.

Strengths

• Higher current yield (~3%)
• Broader diversification (450+ stocks)
• Vanguard's legendary low costs
• Simple, transparent methodology

Weaknesses

• May include "yield traps" (distressed companies with high yields)
• Lower dividend growth rate
• Heavy value stock exposure

Best For

Investors prioritizing current income over growth, especially those near or in retirement.

DGRO: The Growth Engine

iShares Core Dividend Growth ETF focuses on companies with a track record of growing their dividends.

Strengths

• Requires 5+ years of dividend growth
• Lower yield means more reinvestment in growth
• Good balance of sectors
• Strong long-term total return potential

Weaknesses

• Lowest current yield of the three
• May underperform in high-yield environments
• Slightly higher expense ratio (0.08%)

Best For

Younger investors with a long time horizon who prioritize dividend growth over current income.

Which ETF Should You Choose?

Choose SCHD if:

• You want a balance of yield and growth
• Quality metrics matter to you
• You're comfortable with ~100 holdings

Choose VYM if:

• Current income is your priority
• You want maximum diversification
• You prefer Vanguard's approach

Choose DGRO if:

• You have a 10+ year time horizon
• Dividend growth matters more than current yield
• You want exposure to growing dividends

The "All Three" Approach

Many investors choose to hold all three ETFs, allocating based on their goals:

• Accumulation Phase (20s-40s): 50% DGRO, 30% SCHD, 20% VYM
• Transition Phase (50s): 40% SCHD, 30% DGRO, 30% VYM
• Income Phase (60s+): 40% VYM, 40% SCHD, 20% DGRO

Tracking Your ETF Performance

No matter which ETF(s) you choose, tracking your dividend income is crucial for staying motivated and measuring progress toward your goals.

Use DripEdge's Portfolio Tracker to:

• Monitor your dividend income across all holdings
• Project future income based on historical growth
• Visualize your path to financial independence

Conclusion

There's no single "best" dividend ETF—the right choice depends on your goals, time horizon, and risk tolerance. SCHD offers quality and balance, VYM maximizes current income, and DGRO focuses on growth.

Consider your personal situation, and remember: the best investment is the one you'll stick with through market ups and downs.

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Disclaimer: This article is for educational purposes only. Past performance does not guarantee future results. Always do your own research before investing.