As of September 2026, the Schwab U.S. Dividend Equity ETF (SCHD) is up about 20% this year, ahead of the S&P 500's roughly 13% gain over the same period. The ETF currently yields about 3%, above the broader market's level. But PepsiCo, Enterprise Products Partners and Realty Income each offer yields above 4%, giving income-focused investors three individual stocks to examine alongside the fund.
How SCHD Selects 100 Dividend Stocks
SCHD is not simply a basket of the highest-yielding companies. Its underlying index first screens for businesses that have raised their dividends for at least 10 consecutive years. It also excludes real estate investment trusts (REITs) and master limited partnerships (MLPs). The remaining companies are scored using measures including cash flow to total debt, return on equity, dividend yield and five-year dividend growth. The 100 highest-scoring companies are then included in the index.
That process gives SCHD a bias toward businesses with stable operations and a track record of increasing shareholder distributions. The portfolio has performed well in 2026, although it can lag the broader market in other conditions. For investors seeking a higher level of current income, a yield of about 3% may still be limited, making it worth examining companies excluded from the ETF or those offering higher yields.
PepsiCo's Yield Rises to About 4.5%
PepsiCo is a Dividend King, having increased its annual dividend for more than 50 consecutive years. One of the world's largest consumer staples companies, it operates across snacks, beverages and packaged foods, allowing several business lines to support revenue and cash flow.
Its operating performance, however, has not fully returned to ideal levels. The company's long dividend record suggests that the business still has a base from which to improve. With investors taking a cautious view of the stock, PepsiCo's yield has risen to about 4.5%, a relatively high level by its historical standards.
PepsiCo is already an SCHD holding, so considering the stock does not necessarily mean moving outside the ETF's investment universe. At the same time, the higher yield reflects questions about the company's current growth and operating performance. The yield alone does not determine how the business will perform in the future.
Enterprise Has Raised Distributions for 28 Years
Enterprise Products Partners is a master limited partnership and is therefore excluded from SCHD's index rules. The company currently offers a distribution yield of about 5.8% and has increased its annual distribution for 28 consecutive years, covering most of its history as a publicly traded company.
Enterprise is built around fee-based energy infrastructure. It charges customers for the use of pipelines, storage facilities and other energy assets, so its revenue is not driven entirely by short-term moves in crude oil or natural gas prices. For investors seeking exposure to the energy sector without taking on the full commodity-price sensitivity of an oil and gas producer, that creates a different risk profile.
This is one of the main distinctions between Enterprise and producers such as Chevron. Chevron is an SCHD holding, but its results are more directly affected by energy prices and production volumes. Enterprise's high distribution yield still needs to be considered alongside infrastructure utilization, capital spending and debt levels.
Realty Income Has Paid Monthly for 31 Years
Realty Income is excluded from SCHD because of its business structure. As a REIT, it currently yields about 5.8% and has increased its dividend for 31 consecutive years, with payments made monthly.
The company is one of the world's largest net-lease REITs, with more than 15,500 properties across North America and Europe. Its large scale limits the pace of growth, but the higher yield may appeal to investors who place a priority on current cash income.
That scale also supports Realty Income's access to financing. The company has established capital-markets channels that can help it compete when acquiring properties and gradually expand its asset base while maintaining its dividend-growth record. REIT performance remains sensitive to interest rates, borrowing costs, tenant quality and conditions in commercial real estate, however, so the yield cannot be assessed in isolation.
Higher Yields Come With Different Structures
SCHD can serve as a core holding for a dividend-focused portfolio, while PepsiCo offers a long record of dividend growth and is already included in the ETF. Enterprise Products Partners and Realty Income each offer yields of about 5.8%, but their MLP and REIT structures respectively keep them outside SCHD's selection universe.
The key differences are not limited to the headline yield. The companies have different business models, distribution sources and market risks. PepsiCo is dealing with slower growth in consumer products, Enterprise depends on energy-infrastructure cash flow, and Realty Income must manage interest rates and the real estate financing environment. For income-focused investors, those factors are as important as the dividend yields displayed by each stock.