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Home » 2 dividend stocks you can't find in Schwab US Dividend Equity ETF (SCHD). They buy better.

2 dividend stocks you can't find in Schwab US Dividend Equity ETF (SCHD). They buy better.

  • by admin

  • Schwab dividend ETF is a reliable option, but some stocks may offer more room for upside.

  • Philip Morris International's next-generation product is delivering strong growth.

  • Dominion Energy has the potential to rise due to its position in the data center boom.

  • 10 Better Stocks We're More Than Philip Morris International ›

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If you want to invest in dividend stocks, one of the most popular ways is Schwab US Dividend Equity ETF (nysemkt:schd). Exchange-traded funds (ETFs) have a net worth of nearly $70 billion, making them one of the largest dividend ETFs around. And the dividend yield is 3.9%, which is a better option than a S&P 500 The dividend yield currently offered by the ETF is only 1.2%.

The Schwab Dividend ETF is designed to track the Dow Jones-Jones U.S. Dividend 100 Index, with holdings made up of classic blue chip stocks. Its top five are Herringbone, , , , , conocophillips, , , , , Pepsi, , , , , Merckand Anjinindicating that it is drawn from areas known for dividend stocks such as energy, consumer staple foods and healthcare.

ETFs offer advantages such as diversification, but they also have disadvantages, including limited upside potential relative to a single stock. If you are looking for dividend stocks that are not part of the SCHD dividend ETF, read on to see two dividends that look better than performance.

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Schwab US Dividend Equity ETF only holds stocks in the United States, so it's natural Philip Morris International (NYSE: PM) Excluded. Tobacco Giant and Otria 2007. Philip Morris International controls the same set of brands led by Marlboro, but operates them outside the United States

It turned out to be a beneficial stance for the company, as cigarette sales outside the U.S. were stronger in the second quarter, with Philip Morris' cigarette sales down 1.5% while cigarette organic revenues rose 2%.

But what really drives the stock higher is the company's growth in next-generation smokeless products, such as the Iqos Heat-Not-Burn-Burn tobacco rods and its Zyn oral nicotine pouches, and is occupied in the Swedish competition.

In the second quarter, 41% of the company's revenue came from smoke-free products. Revenues for smoke-free products increased by 15.2%, while gross profit increased by 23.3%. Overall, organic revenue grew 6.8% to $10.1 billion, and operating revenue rose 14.9% to $3.7 billion, indicating that its profit margins are expanding as more businesses come from those next-generation products.

The story continues

Given the momentum of these categories, the future is bright even if traditional peers like Altria are struggling. As a dividend payer, Philip Morris also offers a long record of dividend growth, with a current dividend yield of 3.4%. Overall, the stock offers a large combination of growth and revenue.

There are no utilities in the Schwab Dividend ETF because these utilities are represented by different Dow Jones Jones Indexes. Utilities are top-notch, reliable dividend payers, and Domination of energy (NYSE: D) The bill yields 4.5%.

The company earns most of its business through its Virginia power company, which is well positioned to utilities. But as Northern Virginia has become the capital of data centers, the boom in data centers is driving the increase in electricity due to the demand for artificial intelligence (AI).

The company has not reported second-quarter earnings yet, but a headwind of the data center boom appears to be in its first-quarter earnings report as revenue rose 12% to $4.08 billion and its earnings per share (EPS) jumped 50% to $0.75.

Management's full year was $3.28 to $3.52, up 23% from the previous year. Investors also tend to see utilities as a fixed income alternative, so if interest rates drop, Dominion’s share price may rise, although this may not happen anytime soon.

Overall, Dominion provides the security and reliability of utilities with the upside potential of AI stocks. If you are an income investor looking to get exposure to AI, Dominion Energy is a great choice.

Before you buy stocks at Philip Morris International, consider this:

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*Stock Advisor Returns as of July 29, 2025

Jeremy Bowman holds a position in Dominion Energy. Motley Fool recommends Dominion Energy and Philip Morris International. Motley Fool has a disclosure policy.

2 dividend stocks you can't find in Schwab US Dividend Equity ETF (SCHD). They buy better. Originally published by Motley Fool