The Potential and Returns of Dividend Investing
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Source: Fool
- Significant Investment Returns: An investment of $10,000 in the Schwab U.S. Dividend Equity ETF 15 years ago would be worth approximately $61,200 today, showcasing the fund's strong performance and appeal.
- Compound Annual Growth Rate: The ETF has achieved a compound annual growth rate of 13.3% since its inception, with an impressive 29% growth rate over the past 12 months, indicating its competitive edge and investment value in the market.
- Importance of Dividends: Dividends accounted for about 38% of total returns since 2011; without them, a $10,000 investment would only be worth $38,000, highlighting the critical role dividends play in investment returns.
- Comparison with S&P 500: While the Schwab ETF has performed well, it still lags behind the Vanguard 500 Index Fund, which would have turned a $10,000 investment into approximately $79,700 during the same period, illustrating the diversity of market options and the importance of selection.
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Analyst Views on MRK
Wall Street analysts forecast MRK stock price to fall
16 Analyst Rating
11 Buy
5 Hold
0 Sell
Moderate Buy
Current: 129.560
Low
95.00
Averages
119.53
High
139.00
Current: 129.560
Low
95.00
Averages
119.53
High
139.00
About MRK
Merck & Co., Inc. is a global health care company that delivers health solutions through its prescription medicines, including biologic therapies, vaccines and animal health products. Its Pharmaceutical segment includes human health pharmaceutical and vaccine products. The Company sells its human health pharmaceutical products primarily to drug wholesalers and retailers, hospitals, government agencies and managed health care providers. It sells these human health vaccines primarily to physicians, wholesalers, distributors and government entities. Its Animal Health segment discovers, develops, manufactures and markets a range of veterinary pharmaceutical and vaccine products, as well as health management solutions and services, for the prevention, treatment and control of disease in all livestock and companion animal species. Its products include KEYTRUDA (pembrolizumab) injection, for intravenous use; WELIREG (belzutifan) tablets, for oral use; Ohtuvayre (ensifentrine) and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
iShares Core High Dividend ETF Outperforms S&P 500
- Market Outperformance: The iShares Core High Dividend ETF has risen over 15% this year, significantly outperforming the S&P 500's 9% increase, highlighting its investment advantage in high-yield stocks and attracting more income-seeking investors.
- Quality Stock Selection: This ETF tracks an index of high-yield U.S. dividend stocks, currently holding 75 stocks with an annual dividend yield of 2.9%, nearly three times that of the S&P 500, indicating its strong competitive edge in dividend investing.
- Sector Drivers: The fund's high exposure to energy stocks, particularly ExxonMobil and Chevron, which are up 14% and 11% respectively, has significantly boosted its performance, while strong gains from healthcare stocks like AbbVie and Merck have also contributed to its growth.
- Growth Potential: Since its inception in 2011, the iShares Core High Dividend ETF has delivered over 10% annualized returns, and with its focus on high-quality dividend stocks, it is expected to continue providing stable income and growth opportunities for investors.
See More
iShares Core High Dividend ETF Surges Over 15% Year-to-Date
- High-Yield Stock Advantage: The iShares Core High Dividend ETF has surged over 15% this year, primarily benefiting from its higher exposure to high-yield energy stocks, particularly ExxonMobil and Chevron, which have risen 14% and 11% respectively, thus driving the fund's overall performance.
- Healthcare Stock Contribution: The ETF has also gained from its significant allocation to healthcare stocks, notably AbbVie and Merck, with AbbVie shares up over 14% and Merck up over 23%, indicating that high-quality dividend stocks can deliver substantial total returns.
- Dividend Yield Comparison: The iShares Core High Dividend ETF currently boasts a dividend yield of 2.9%, nearly three times the S&P 500's yield of 1.1%, highlighting its advantage in providing stable cash flow, which attracts income-seeking investors.
- Strong Long-Term Performance: Since its inception in 2011, the ETF has delivered over 10% annualized returns over the past one, three, and five years, indicating success in its investment strategy focused on high-quality dividend stocks, and it is expected to continue providing strong returns in the future.
See More
Market Health Signals: Strong Performance in Healthcare and Agriculture Stocks
- Healthcare Stock Rebound: Merck (MRK) has seen a cumulative return of -5% from 2023 to 2025, yet it has risen approximately 14% YTD, reaching an all-time high on June 29, indicating market confidence in its future despite the looming patent expiration of Keytruda.
- Strong Agricultural Stocks: Archer-Daniels-Midland (ADM) is up about 29% YTD, reporting $20.5 billion in Q1 revenue, with management raising full-year adjusted EPS guidance to $4.15-$4.70, driven by new federal biofuel blending requirements and rising soybean oil prices.
- Outstanding Asset Management Performance: State Street Corp. (STT) has surged 60% over the past year, with Q1 total revenue increasing 16% year-over-year to $3.8 billion, and management raising full-year fee revenue growth guidance to 7-9%, reflecting strong market demand and profitability.
- Market Rotation Strategy: As the S&P 500 continues to churn, investors are advised to focus on strong stocks in underperforming sectors, particularly in healthcare and agriculture, to capitalize on potential opportunities during market rotations.
See More
SCHD Delivers 227% Return Over 10 Years with Strong Cash Flow Stability
- Strong SCHD Performance: SCHD has achieved a remarkable 227% return over the past decade, demonstrating its robust ability to maintain stable cash flows and dividend growth, which appeals to conservative investors.
- Coca-Cola's Consistent Growth: Coca-Cola expanded its operating margin to 35% in Q1 2026, with free cash flow surging 132% to $1.76 billion, marking its 63rd consecutive annual dividend increase to $0.53 per quarter, indicating the safety of its dividend payments.
- Verizon's Financial Resilience: Despite Verizon's total debt climbing to $172.5 billion, its 2025 free cash flow of $20.1 billion comfortably covers the $11.5 billion dividend, showcasing its financial resilience in a high-leverage environment.
- Chevron's Stable Dividends: Chevron pays a quarterly dividend of $1.78, and although its Q1 free cash flow was negative, the long-term free cash flow expectation of $16.6 billion reflects management's strong commitment to maintaining dividend payments.
See More
Schwab U.S. Dividend ETF Shows Strong Performance
- CAGR Performance: The Schwab U.S. Dividend ETF has achieved a compound annual growth rate (CAGR) of 13.3% since its inception in 2011, indicating strong performance despite not being available for a full 15 years.
- Dividend Contribution: Approximately 38% of the ETF's total returns come from dividends, highlighting their significance in investment returns; without dividends, an initial $10,000 investment would only be worth about $38,000 today.
- Portfolio Diversity: The ETF currently holds 103 stocks, primarily investing in financially sound U.S. companies that consistently pay dividends, such as Merck, Home Depot, and Coca-Cola, ensuring stability and profitability in its investments.
- Market Comparison: While the Schwab ETF has performed well, an investment of $10,000 in the S&P 500 index fund on October 20, 2011, would have grown to approximately $79,700, illustrating the competitive nature of the market.
See More
The Potential and Returns of Dividend Investing
- Significant Investment Returns: An investment of $10,000 in the Schwab U.S. Dividend Equity ETF 15 years ago would be worth approximately $61,200 today, showcasing the fund's strong performance and appeal.
- Compound Annual Growth Rate: The ETF has achieved a compound annual growth rate of 13.3% since its inception, with an impressive 29% growth rate over the past 12 months, indicating its competitive edge and investment value in the market.
- Importance of Dividends: Dividends accounted for about 38% of total returns since 2011; without them, a $10,000 investment would only be worth $38,000, highlighting the critical role dividends play in investment returns.
- Comparison with S&P 500: While the Schwab ETF has performed well, it still lags behind the Vanguard 500 Index Fund, which would have turned a $10,000 investment into approximately $79,700 during the same period, illustrating the diversity of market options and the importance of selection.
See More
iShares Core High Dividend ETF Outperforms S&P 500
- Market Outperformance: The iShares Core High Dividend ETF has risen over 15% this year, significantly outperforming the S&P 500's 9% increase, highlighting its investment advantage in high-yield stocks and attracting more income-seeking investors.
- Quality Stock Selection: This ETF tracks an index of high-yield U.S. dividend stocks, currently holding 75 stocks with an annual dividend yield of 2.9%, nearly three times that of the S&P 500, indicating its strong competitive edge in dividend investing.
- Sector Drivers: The fund's high exposure to energy stocks, particularly ExxonMobil and Chevron, which are up 14% and 11% respectively, has significantly boosted its performance, while strong gains from healthcare stocks like AbbVie and Merck have also contributed to its growth.
- Growth Potential: Since its inception in 2011, the iShares Core High Dividend ETF has delivered over 10% annualized returns, and with its focus on high-quality dividend stocks, it is expected to continue providing stable income and growth opportunities for investors.
See More
iShares Core High Dividend ETF Surges Over 15% Year-to-Date
- High-Yield Stock Advantage: The iShares Core High Dividend ETF has surged over 15% this year, primarily benefiting from its higher exposure to high-yield energy stocks, particularly ExxonMobil and Chevron, which have risen 14% and 11% respectively, thus driving the fund's overall performance.
- Healthcare Stock Contribution: The ETF has also gained from its significant allocation to healthcare stocks, notably AbbVie and Merck, with AbbVie shares up over 14% and Merck up over 23%, indicating that high-quality dividend stocks can deliver substantial total returns.
- Dividend Yield Comparison: The iShares Core High Dividend ETF currently boasts a dividend yield of 2.9%, nearly three times the S&P 500's yield of 1.1%, highlighting its advantage in providing stable cash flow, which attracts income-seeking investors.
- Strong Long-Term Performance: Since its inception in 2011, the ETF has delivered over 10% annualized returns over the past one, three, and five years, indicating success in its investment strategy focused on high-quality dividend stocks, and it is expected to continue providing strong returns in the future.
See More
Market Health Signals: Strong Performance in Healthcare and Agriculture Stocks
- Healthcare Stock Rebound: Merck (MRK) has seen a cumulative return of -5% from 2023 to 2025, yet it has risen approximately 14% YTD, reaching an all-time high on June 29, indicating market confidence in its future despite the looming patent expiration of Keytruda.
- Strong Agricultural Stocks: Archer-Daniels-Midland (ADM) is up about 29% YTD, reporting $20.5 billion in Q1 revenue, with management raising full-year adjusted EPS guidance to $4.15-$4.70, driven by new federal biofuel blending requirements and rising soybean oil prices.
- Outstanding Asset Management Performance: State Street Corp. (STT) has surged 60% over the past year, with Q1 total revenue increasing 16% year-over-year to $3.8 billion, and management raising full-year fee revenue growth guidance to 7-9%, reflecting strong market demand and profitability.
- Market Rotation Strategy: As the S&P 500 continues to churn, investors are advised to focus on strong stocks in underperforming sectors, particularly in healthcare and agriculture, to capitalize on potential opportunities during market rotations.
See More
SCHD Delivers 227% Return Over 10 Years with Strong Cash Flow Stability
- Strong SCHD Performance: SCHD has achieved a remarkable 227% return over the past decade, demonstrating its robust ability to maintain stable cash flows and dividend growth, which appeals to conservative investors.
- Coca-Cola's Consistent Growth: Coca-Cola expanded its operating margin to 35% in Q1 2026, with free cash flow surging 132% to $1.76 billion, marking its 63rd consecutive annual dividend increase to $0.53 per quarter, indicating the safety of its dividend payments.
- Verizon's Financial Resilience: Despite Verizon's total debt climbing to $172.5 billion, its 2025 free cash flow of $20.1 billion comfortably covers the $11.5 billion dividend, showcasing its financial resilience in a high-leverage environment.
- Chevron's Stable Dividends: Chevron pays a quarterly dividend of $1.78, and although its Q1 free cash flow was negative, the long-term free cash flow expectation of $16.6 billion reflects management's strong commitment to maintaining dividend payments.
See More
Schwab U.S. Dividend ETF Shows Strong Performance
- CAGR Performance: The Schwab U.S. Dividend ETF has achieved a compound annual growth rate (CAGR) of 13.3% since its inception in 2011, indicating strong performance despite not being available for a full 15 years.
- Dividend Contribution: Approximately 38% of the ETF's total returns come from dividends, highlighting their significance in investment returns; without dividends, an initial $10,000 investment would only be worth about $38,000 today.
- Portfolio Diversity: The ETF currently holds 103 stocks, primarily investing in financially sound U.S. companies that consistently pay dividends, such as Merck, Home Depot, and Coca-Cola, ensuring stability and profitability in its investments.
- Market Comparison: While the Schwab ETF has performed well, an investment of $10,000 in the S&P 500 index fund on October 20, 2011, would have grown to approximately $79,700, illustrating the competitive nature of the market.
See More
The Potential and Returns of Dividend Investing
- Significant Investment Returns: An investment of $10,000 in the Schwab U.S. Dividend Equity ETF 15 years ago would be worth approximately $61,200 today, showcasing the fund's strong performance and appeal.
- Compound Annual Growth Rate: The ETF has achieved a compound annual growth rate of 13.3% since its inception, with an impressive 29% growth rate over the past 12 months, indicating its competitive edge and investment value in the market.
- Importance of Dividends: Dividends accounted for about 38% of total returns since 2011; without them, a $10,000 investment would only be worth $38,000, highlighting the critical role dividends play in investment returns.
- Comparison with S&P 500: While the Schwab ETF has performed well, it still lags behind the Vanguard 500 Index Fund, which would have turned a $10,000 investment into approximately $79,700 during the same period, illustrating the diversity of market options and the importance of selection.
See More
