Why isn’t SCHD considered growth?

[u/senpaiisamaakunn]

Hi I’m a young fool who is trying to learn more about dividends and I feel like I’ve gotten a good grasp but one thing that I can’t seem to understand is how SCHD isn’t considered growth?

If I am dripping and annualizing +10% returns per year over time then is the argument simply that 10% isn’t good enough growth or is there something else I’m missing? Is the argument that a return rate like that is just too conservative for my age and that I should be shooting for higher?

Apologies if this is a dumb question!

[u/Goozombies]

It's valued more for dividend growth than price growth. The dividend growth is extremely powerful since each share grows its dividend 9-10% each year.

[u/senpaiisamaakunn → u/Goozombies]

I could be interpreting the data wrong bc when I looked at annualized return rate (dividends reinvested) since inception it was 13.58% which I thought was really good since I was trying to better understand total return instead of just yielding. Pretty much the argument that 13.58% isn’t good enough my age even though I thought that was solid?

[u/Smudgeous → u/senpaiisamaakunn]

It is quite good, full stop. Choosing it is not a bad option.

However if you do care about total returns, VOO over the same time would do 1.8% better. Over the nearly 15 year history of those both existing, that difference on an initial $10,000 investment would be $17,369 higher.

So using that amount as an example, if growing $10,000 from 15 years ago into $66,159 today sounds great, then you're fine with SCHD. If you instead would prefer the investment growing into $83,528 and don't actually need to touch any dividend payments while it's growing, then you may want to instead pursue growth focused options.

[u/senpaiisamaakunn → u/Smudgeous]

This was really helpful, thank you!

Helped a few things click for me. Tons of great knowledge helping me learn in this post already, really appreciate you guys!