Let’s look at Exxon Mobil (XOM) and SCHD. XOM is a huge oil company. SCHD is a big ETF that pays out dividends from many strong companies. Some people like XOM for its history and steady business. But if you want bigger dividend payouts, SCHD has a higher yield.
If you check the numbers, SCHD’s dividend yield is higher than XOM’s recent yield. XOM pays a good dividend, but it just can’t beat SCHD right now. SCHD grabs stocks from lots of companies, not just one. That’s one reason it can offer more yield. XOM’s yield is lower because oil prices move up and down. When oil prices fall, XOM’s payouts can slow down. SCHD is less risky since it spreads out the risk across many dividend stocks.
Some people think owning XOM is safer because it’s been around forever. But if your goal is more income, SCHD wins. SCHD’s top holdings are strong companies that keep paying dividends even in tough markets. So, you get a smoother ride with SCHD than betting on one oil company.
You might want to look at other dividend ideas too. If you like comparing yields, check out this post: Dividend yields compared: SCHD outperforms. Or see how other ETFs stack up against SCHD here.
If you only look at XOM, you miss the bigger dividend story. SCHD shows that you can get paid more just by owning more companies. XOM is okay for oil fans, but dividend fans have better choices.
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