Dividend ETF SHOWDOWN! | Vanguard vs. Schwab: VYM vs. SCHD - The BEST Dividend ETF | Investing

welcome back to the dividend diplomats youtube channel you've got bertha heard over there in his corner and you know you got lanny over here in this corner and we are here to bring you the dividend etf showdown that everybody has been wanting to see bird you know the drill before we get there smash that subscribe button give us a thumbs up everybody we have heard you loud and clear we've done these etf battle royales before but there was one that was missing last time but we were saving that for the next wrestlemania we can't do them all at once so here we are we're getting ready to put two weights in the ring to see which one of these dividend-focused etfs comes out on top so if you remember we put three dividend etfs in the ring essentially the royal rumble and you know call me biased but i'm going to say vanguard's bym stood as the last man standing in the ring what do you think bert i agree but what happens when you win the the royal rumble or one of those battle royales landing you earn a championship shot against another one of the titans in there to see which one of those are going to come out with the belt so who we're going to come who are we going to compare vanguard's high dividend yield etf vym2 in this video lanny will you listen up mean bert everybody's been talking about the other eighth wonder of the world the schwab us dividend equity etf jack dead ticker symbols schd and i said brother with all these 24-inch pythons and the 48 billion of assets under management i'm here to ready to take you on jack we love it so here we are van schwab's dividend fund is now going up against vanguard's high dividend yield etf who also has a insane amount of assets under management vanguard's etf has 48.6 billion assets under management so it's larger it's bigger than schwab it's double the size of it but the devil is in the details it's all about the metrics to see which one of them is going to come out on top this is going to be a great great video bigger doesn't always mean better or does it and that's what we're here to find out again we've got vanguards vym and schwab's etf schd the colossus of cloud you've got babe ruth and hank aaron you have you know essentially the two akron giants of lebron james and steph curry they're going head-to-head here this is like the 2015-2018 nba final battles right here it's a lot of hype that we're building up there but see hopefully the cavs come out with more than one championship during that time but we'll see what happens we know hey we got one and that's all that matters and we will never forget that championship you have one so bert you know with vanguard and schwab let's go over how many different different different dividend stocks that each hold and what are the top 10 holdings sure let's dive into vym here with they have the largest of the two holdings they have 414 holdings right there and you can compare that to schwab who has significantly less they only have 103 holdings under their belt but again those are both very diversified portfolios let's dive into those top 10 there lanny who are some of the companies in the top 10 holdings for vym and how much of their holdings do the top 10 account for so the top 10 you know granted they have more stocks so you'd naturally assume that they don't have that large concentration in their top ten but they do have two of our top five foundation stocks with johnson and johnson proctor gamble they do have jp morgan which was censored a big bank showdown the one diy with home depot they do have bert's favorite bank stock bank of america they have comcast exxon mobil intel and the thong song cisco great companies that are always featured on our youtube channel we've actually covered a lot of these recently in fact i can think of videos over the last three or four months where we've discussed each one of these companies but that makes sense and that makes sense why we love bym so much because they invest they invest in dividend growth stocks and it matches our investment strategy that's ultimately what brings us to vym over and over again and did you say what percent of the top of the holdings lanny i can't remember three percent 23 right there so not too large let's look over at schwab much different blend here of companies that make up their top ten but there's still also a bunch of great dividend stocks home depot ibm one of our favorite but controversial tech stocks because man that company has not grown their dividend at all they have texas industries they have blackrock pfizer pepsi cisco there you go another thon song reference right there broadcam broadcast coke and 3m one of my personal favorite dividend stocks although hey really would appreciate some of the dividend growth more right there from from 3m because it has not been great recently you know if we actually look at the list they do share two commonalities home depot and cisco so you know share a couple of the same top 10. but bro what's the concentration of the top 10 from the stat that you read from the facts much larger it's 40.45 so they're very heavily concentrated luckily these are some great dividend stocks in the top ten so at least they're not all concentrated in heavy oil companies it's spread out amongst the industries at least so that's a great sign so you know schwab's schd top 10 40 vanguards etf of bym top 10 23 414 stocks versus 103 stocks and bert what was that asset under management comparison for vanguard's vym versus charles schwab's s-c-h-d 48.6 billion with vanguard to 23.5 billion so wider funds large amounts though that's a lot of money in these funds what's big though is obviously as an investor in an exchange traded fund or etf the big thing is you want to look at the expense ratio so with an etf typically since those are more passively managed the expense ratio is lower so bert who wins the expense ratio battle here i think they both hit each other at the same time when they throw the punches both of them have very very very very low expense ratios of point zero four times they both go yeah exactly that's what's funny both are very cheap and these are that's exactly what you want to see for etfs that's why people prefer etfs you they always got to watch out with mutual funds and ets because expense ratios that are high can creep up and eat at your returns these not so much that is very well way well below the industry average wow yep so you're getting that as i always say a hell of a deal with both of them on the expense ratio with vanguard and charles schwaber chuck schwab as a lot of people like to call yeah so i was gonna say now that we've kind of gone through some of the background of the funds we've talked about some of their top holdings their expense ratios we're going to run them through as much of the stock screener as we can because you can still compare them using the three metrics of the dividend stock screener which are p e ratio less than the s p 500 payout ratio less than 60 and a history of increasing dividend so we're going to run both of them through compare the metrics the currently today's date at the time of this recording is june 15th so that's going to be the close price for each one of these so please keep that in mind as you continue to watch this video at a later date let's jump right in lanny what do you think vym you want to kick it off with the p e ratio so the p e ratio that they're reporting on their fund site the etf site you know since it's hard to gauge what the earnings is but we're going to use it at face value here so the earnings per share with vanguard based on the calc is 524 and for charles schwab the earnings per share is 374. so that's equating out to a current price to earnings ratio of 20.4 for vanguard and 21.27 for charles schwab's schd very interesting both are trading below the s p 500 current p e ratio of around 45 x but interestingly that's in line with the s p 500 forward p e ratio which is in that low 20 so makes sense these are these are funds that are kind of replicating the market with a dividend twist on there so it's a slight undervaluation compared to the market but not much overall though they're pretty similarly priced with the vom vym at a slight discount to schwab the bym just dodged one right there but i don't know i think schwab saying hey what about the payout ratio bert what about the payout ratio what about the payout ratio we'll come back to the dividend in a little bit by using using the trailing 12 month dividend for the funds we pulled together the last four quarterly dividends bym has a 12-month dividend of 301. take that divided by the 5.24 dps that gives you a payout ratio of 57.4 right under our 60 metric compare that to schwab has a trailing 12-month dividend of two dollars and nine cents divide that by the 374. another similar payout ratio of 55.82 percent so both are right in that perfect payout ratio range very similar once again and just below that 60 percent threshold that we use in our stock screener very similar kind of like the price to earnings vanguard squeaks by chuck schwab charles schwab's schd but schd slightly edges vanguard's bym and the payout ratio department here very interesting both are looking good though very similar which is what we like to see lanny do you want to talk about the dividend growth history right here i know you love dividend growth history for etfs i love dividend growth and gosh darn it guys if everybody's watching this video june 2021 that dividend for both of these should be very very nice compared in june of 2020's dividend it better be it better be uh but the five year average you know through the manual calculation of this vanguard's vlam which we've been touting is around seven percent dividend growth they're at six point eight four dividend growth taking the last you know consecutive 12 trailing 12 months or trailing four quarters so essentially you know for example q121 all the way to q2 2020 that's four quarters so we're chunking out the four quarters and that's what the dividend growth rate looks like for vanguard six point eight four percent but charles schwab's schd their dividend etf just pulled up the big boot i'm talking big boot because it calculated out to an average dividend growth rate of 12.45 wow that's huge dividend growth right there i was not expecting it to be that much larger if anything going into this analysis i was expecting another very similar dividend growth rate huge for schwab right there did not see that coming so fantastic difference between the two that's kind of the first time they have veered apart on this path and in this analysis so yeah but there's still plenty of other metrics we want to take a look at here let's jump into one of our bonus metrics the dividend yield because let's be honest we can't we can't do a match here without talking about the dividend yield especially when these are high dividend yield funds that's like the rock doing a match without giving the people's elbow at the end of it it's just not gonna happen you just don't know when but it's happening yeah the vanguard though vym's dividend yield is 2.81 percent schwab lanny i'm expecting schwab's dividend yield to be a little bit higher with this high dividend growth will you tell me about why it may or may not be different let us know well you know with a lower payout ratio you would expect a lower yield than a higher growth rate you would expect also a lower yield however it's not that much lower charles schwab's schd dividend yield is actually 2.624 percent based on that trailing 12-month dividend of 2.09 over that 79.61 stock price so very similar once again both well above the market which is what you're looking for in one of these high dividend yield it's great to see the yields are similar but you're getting that nice premium to the market all right so running through the metrics here we can do a quick summary here just to bring it all home p e ratio for vym we'll start with vanguard 20.4 payout ratio 57.4 percent five-year average dividend growth rate of 6.84 and a dividend yield here of two point eight one percent landy let's you wanna tell us about schwab you know schwab again you've got a price to earnings ratio 21.27 payout ratio at just under 56 five-year average dividend growth rate up around 12.45 with a current yield of 2.62 percent interesting i want to throw one more curveball in here because this came up in our last etf video so let's just take a quick look at it how are these two funds performing here today how are the performance of them is there a big difference are one of them losing value one of them gaining value is it close so we took the year-to-date stock price appreciation just to see vanguard its price has gone up 16.92 percent year-to-date compare that to schwab 19.91 so schwab has appreciated slightly more than vanguard by a nice little three percent right there okay returns a return um you know it's good to know that vanguard ceo bym has been around since november of 2006 so going on a nice 15 years and then charles schwab's schd has been around for about 10 years going on so you know a little bit more history as well with vanguard's bym um you know very uh very interesting here i would say they're both very good i mean this one would probably be like an iron man badge this one could go on for 60 minutes number of pinfalls wins within that 60 minute because each has a little give and take a little lower payout ratio a little higher yield um you know a little bit more of uh you know i would say diversification within the fun for vanguard i mean i would say this is almost like a rock hogan and so one of them has to be the winner but i mean it's going to be a fantastic match and fans are going to come away happy rock fans are happy your hogan fans are happy just because you saw the two of them in the ring together i mean yeah and you have charles schwab's schd solid metric great growth rate i think the dividend growth rate's the big piece here i mean that one really made them you know i think get the finisher on uh vanguard but i'm very happy with vanguard's view i am you know we're looking at a five and a half month year-to-date performance we would have to go back to look at the entire since inception performance long-term averages which we don't have here um you know overall i'm going to continue my investment strategy with vanguard but if you own schd yeah great etf that's a fantastic etf and they are clearly great to own rarely do we come away from an analysis where we feel great about both companies that are in there and it's not that we're endorsing one over the other we're saying you can't go wrong picking vym you can't go wrong picking schd for your portfolios because the metrics for both are similar and they're great and their top ten holdings are some fantastic dividend growth stocks hey or what do you think i mean that's really it i think both are great i don't i don't really have one or over the other i don't see why you would adjust your vym strategy i don't know why somebody if they were doing weekly purchases of the schwab fund would adjust their strategy as a result of all of this so guys let's hear it in the comments you've seen it you've now can you know listen to it here are the numbers what do you think schd or vanguard's bym schwab versus vanguard new school and for all those people that wanted us to put schd in here we want to hear your opinion specifically because now that we talked about them what are your thoughts about this i'm calling all of you out that said why didn't you put them in our last analysis there it is guys again if you haven't already give this video a thumbs up smash that subscribe button as we journey our way to 10 000 subscribers we appreciate that again that was bertha hurt and lanny from the dividend diplomats with the dividend etf showdown over and out

Channel: Dividend Diplomats

Views: 6,443

Keywords: vanguard ETF, Schwab ETF, Vanguard Dividend ETF, Schwab Dividend ETF, SCHD, VYM, What is the best dividend ETF, Is Vanguard better than Charles Schwab?, Should I invest in Vanguard?, Should I invest in Schwab?, SCHD or VYM, Which dividend ETF to buy now, what's the best dividend ETF to buy, how to invest in dividend stocks, how to start investing, how to start dividend investing, what is dividend investing, what is a dividend, investing for beginners, passive income, dividends

Id: lk2XogETOlI

Length: 17min 54sec (1074 seconds)

Published: Thu Jun 17 2021