SCHD’s Holdings See Better Earnings Ahead

The companies inside this popular dividend fund are collectively signaling stronger results are on the way.

Texas Instruments, making up 6.4% of the Schwab US Dividend Equity ETF (SCHD), just raised its own EPS guidance by a striking 41.5%. That’s a significant revision from a single large holding, but it’s also part of a much broader, positive signal coming from inside the fund.

A Decidedly Upward Tilt

When you look under the hood at the companies you own through SCHD, the story is one of broad improvement. Holdings that make up 39.7% of the fund’s weight recently raised their core guidance for things like revenue or earnings. That’s a much larger slice of your investment than the 12.8% of the fund that cut its outlook. By count, 14 of the largest holdings raised their forecasts, while only 3 cut them.

The Movers Behind The Signal

This positive signal isn’t coming from just one place. While Texas Instruments was the largest contributor, other heavyweights like UnitedHealth (UNH), at 5.5% of the fund, and Coca-Cola (KO), at 4.1% of the fund, also raised their EPS guidance. On the other side of the ledger, the biggest drag came from Qualcomm (QCOM). As 6.2% of the fund, its decision to lower its EPS guidance by 24.0% provided a meaningful counterweight, but it was ultimately outnumbered.

What This Forward Signal Suggests

So what does this mean for your position in SCHD? The fund has already returned +24.1% over the past year. But that’s the past. This collective shift in forward guidance is a signal about the future. It suggests the fundamental earnings power of the companies you own is strengthening. When the companies inside an ETF are telling you they expect to earn more, it provides a firmer foundation for the fund’s valuation.

Ultimately, an index fund is just the sum of its parts. Right now, the parts that make up SCHD are, by a significant margin, pointing toward better times ahead for their own businesses. This doesn’t guarantee where the fund’s price will go next. But it does mean that as an owner, you have the fund’s underlying earnings momentum working in your favor, a forward-looking tailwind that trailing performance numbers can’t show you.

Why Own The Basket When You Can Own The Raisers?

Seeing this many companies inside SCHD lift their outlook, it is tempting to skip the basket entirely. If rising guidance is the signal, why not just own the companies actually raising it? We know what you are thinking, and it is an absolutely fair question.

You can, and the idea has real teeth. These are exactly the names our Guidance-Driven Momentum screen is built to surface, companies whose fresh revenue or earnings-per-share raises are already carrying their stock above both its 50-day and 200-day averages, the live proof that a raise the market believes in tends to keep working.

But here is something you may not have weighed. First, timing and momentum are doing real work: a guidance raise only pays once the market agrees with management, which is exactly what a price holding above its moving averages confirms, and a raise the tape keeps shrugging off can be a value trap. Second, the companies raising guidance often cluster around the same tailwind, where a single theme like artificial intelligence can be lifting most of them at once, so a hand-picked basket of guidance-raisers can quietly become one concentrated bet.

So Where Does That Leave A Long-Term Owner?

None of that makes the idea wrong, it just means doing it well takes work: you have to judge the timing and manage the concentration yourself. If that is the part you would rather not run by hand, our High Quality (HQ) Portfolio is one way to keep the exposure without the homework. It holds 30 individually screened names spread deliberately across different kinds of businesses rather than one crowded theme, rule-based and re-balanced on a schedule, so it leans into improving fundamentals while trimming what has run and rotating out of names whose outlook is turning, never resting the whole thing on a single sector or a single quarter. It has a record of outpacing a benchmark that combines all major indices – the S&P 500, S&P Mid-cap, and Russell 2000.