If you’re holding DGRO, there’s something happening behind the scenes that could change how you see your portfolio.
In 2025, DGRO’s annual dividend growth came in at just 4.73%.
Now compare that to SCHD’s ~10.99% 10-year dividend growth rate.
That’s not a small gap.
That’s SCHD growing income more than twice as fast.
And yet… almost nobody is talking about it.
📉 Is DGRO really slowing down?
Let’s be fair — DGRO is NOT collapsing.
In fact, in Q1 2026, it paid 33.11 cents per share, up from 31.09 cents a year earlier.
That’s about +6.5% growth year-over-year for the quarter.
So no, DGRO didn’t suddenly “break.”
But here’s the catch:
👉 The problem only appears when you zoom out to the full year
- 2024 dividend: ~1.39
- 2025 dividend: ~1.45
- Growth: ~4.73% YoY
That’s the real story — slow, steady, but clearly decelerating.
🧠 Why is this happening?
DGRO tracks a dividend growth index that only requires:
✔ 5 years of dividend increases
✔ No REITs
✔ Avoids high-yield “traps”
✔ Weighting based on dividend dollars
Sounds solid… but here’s the issue:
👉 5 years is a very low bar
That means companies can qualify even if:
- Their dividend growth drops from 8% → 2%
- They barely increase payouts
- They’re mature mega-cap giants
And guess what dominates DGRO?
📊 Top holdings include:
- Apple
- Microsoft
- ExxonMobil
- J&J
- JPMorgan
- P&G
- AbbVie
- Philip Morris
These are strong companies — but many are now in low single-digit dividend growth mode.
So DGRO becomes what it was designed to be:
👉 A low-risk, slow-growth dividend machine
Not a fast income accelerator.
🚀 Enter SCHD: the aggressive income grower
SCHD is a different beast.
It screens for:
- 10+ years of dividend growth
- Strong cash flow
- High return on equity
- Quality scoring system
And the result?
📈 SCHD 10-year dividend CAGR: ~10.99%
💰 Yield: ~3.4%
💰 DGRO yield: ~2.1%
That’s a ~60% higher starting income for SCHD.
Example:
- $50,000 in DGRO → ~$1,060/year
- $50,000 in SCHD → ~$1,700/year
That’s a real income gap from day one.
⚖️ But here’s the twist most people miss…
Despite slower dividend growth…
👉 DGRO has actually beaten SCHD in total return over the last 10 years (~290% vs ~263%)
Why?
Because DGRO is heavily exposed to:
- Apple
- Microsoft
- Large-cap growth winners
So even if dividends lag…
💡 price appreciation carried it higher
🧭 So which one actually wins?
It depends on your phase of life:
🟢 DGRO makes sense if:
- You’re still accumulating wealth
- You want broader diversification (400 stocks)
- You care about total return more than income
🔵 SCHD makes sense if:
- You’re closer to retirement
- You want rising cash flow
- You prefer higher starting yield + faster income growth
🔥 The smartest middle path?
Many investors are now doing this:
👉 50% DGRO + 50% SCHD
Why?
- DGRO = stability + growth exposure
- SCHD = income acceleration
You don’t bet everything on one strategy.
You combine both engines.
📊 The 2026 reality check
So far in 2026:
- SCHD: strong price momentum (~+12% YTD in some periods)
- DGRO: much weaker (~+1–2% YTD range)
Markets are currently rewarding:
👉 higher quality + more selective dividend growth
🧠 Final takeaway
DGRO isn’t broken.
But it is slow.
SCHD isn’t perfect either.
But it’s more aggressive in growing income.
And the real question is not:
👉 “Which is better?”
It’s:
👉 “Do you want faster income… or broader long-term total return?”
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