The Best Dividend ETF to Buy in April 2026 If You Want Passive Income

By Stefon Walters – Apr 5, 2026 at 9:22AM ESTKey PointsCompanies must meet four key criteria to be included in the Schwab U.S. Dividend Equity ETF.This ETF has noticeably reduced its stake in the energy and materials sectors.Its dividend yield is more than three times the S&P 500 average.It has been a rocky start to the year for many major indexes and big-name stocks. It's not the best feeling, but it reaffirms why investing in dividend stocks can be so effective: You're rewarded for simply holding a stock, regardless of how the price moves. Dividend stocks aren't immune to volatility or slumps, but their payouts act as a natural hedge and provide passive income. If you're looking for passive income (that's always a good choice), consider one of the most popular dividend exchange-traded funds (ETFs) on the market: the Schwab U.S. Dividend Equity ETF (SCHD +0.16%). It remains a great, reliable choice. Image source: The Motley Fool. Doing some of the legwork for you With many stocks down through the first three months of the year, you'll notice some dividend yields look much more attractive. A high yield is good, yes, but only when it's due to a high payout and is sustainable. It's not always obvious if that's the case, but one benefit of this Schwab ETF is that the criteria companies must meet to be eligible for inclusion in the index that it mirrors (the Dow Jones U.S. Dividend 100 Index). The Schwab U.S. Dividend Equity ETF looks at a company's five-year dividend growth, return on equity, cash flow to debt, and dividend yield. That isn't to say some yield traps can't fall through the cracks, but it's a built-in vetting process that reduces the chances of it happening. This fund looks a bit different now than before When this Schwab ETF did its annual reconstitution (the changing of holdings) recently, it removed 22 stocks and added 25. Notable removals included AbbVie, Cisco Systems, and Valero; notable additions included UnitedHealth Group, Procter & Gamble, and Abbott Laboratories. After the reconstitution, the sector exposure changed noticeably. Health care and tech increased by 3.6% and 3.4%, respectively. Energy and materials exposure decreased by 7.1% and 3%, respectively. ExpandNYSEMKT: SCHDSchwab U.S. Dividend Equity ETFToday's Change(0.16%) $0.05Current Price$30.56Key Data PointsDay's Range$30.38 - $30.6452wk Range$23.87 - $31.95Volume21M The decrease in energy stocks is notable because the sector has been the best performer over the first three months of the year, largely due to the Middle East conflict, which has driven up oil prices. Any changes in the situation could flip the script, so it makes sense to limit exposure to those stocks, especially after the impressive run at the beginning of the year. A consistent dividend you can depend on As of market close on April 1, the ETF's dividend yield was close to 3.5%, slightly below its 3.6% average over the past three years. Its current yield is more than three times the S&P 500 average, and its average yield over the past three years is more than 2.5 times the S&P average. Data by YCharts. It might not be the ultra-high yield you can receive from some individual stocks, but when it comes to consistent, growing passive income from a dividend ETF, it's hard to beat it. And you don't have to second-guess its stability; it's as dependable as it comes.Read NextApr 5, 2026 •By Reuben Gregg Brewer3 High-Yield ETFs to Buy With $500 and Hold ForeverApr 2, 2026 •By David Dierking3 Dividend ETFs Quietly Outperforming the Market Right NowApr 1, 2026 •By Matt DiLallo7 Best ETFs to Buy in April 2026Apr 1, 2026 •By Matt DiLalloMove Over Energy Stocks. This Uber-Popular Dividend ETF Has a New Favored Income Source.Apr 1, 2026 •By Sean WilliamsThis Is the Smartest ETF to Buy as the Dow Jones Industrial Average and Nasdaq Composite Enter Correction TerritoryMar 31, 2026 •By Catherine BrockWho Owns Ford? Largest Shareholders & Board of DirectorsAbout the AuthorStefon Walters is a contributing Motley Fool stock market analyst covering publicly traded companies across technology, consumer goods, and financials, as well as retirement planning. Stefon is a published author and has more than a decade of experience teaching financial literacy. He holds a bachelor’s degree in economics from the University of North Carolina at Chapel Hill.TMFStefonWStocks MentionedSchwab U.S. Dividend Equity ETFNYSEMKT: SCHD$30.56(+0.16%)+$0.05*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.