4. Schwab U.S. Dividend Equity ETF (NYSE:SCHD)
Schwab U.S. Dividend Equity ETF (NYSE:SCHD) closely tracks the total return of the Dow Jones U.S. Dividend 100 Index. Due to its low expense ratio of only 0.06%, the fund offers tax efficiency. At the end of May 2022, Schwab U.S. Dividend Equity ETF (NYSE:SCHD)’s total net assets came in at $36.6 billion. As of April 30, the ETF offers a distribution yield of 3%.
One of the top holdings of Schwab U.S. Dividend Equity ETF (NYSE:SCHD) is Pfizer Inc. (NYSE:PFE), an American multinational pharmaceutical and biotechnology corporation. On May 23, SVB Leerink analyst David Risinger initiated coverage of Pfizer Inc. (NYSE:PFE) with a Market Perform rating and a $55 price target. The analyst is bullish on the company’s plans to increase innovation, but struggles to forecast the magnitude and durability of pandemic-related profits beyond 2022.
Pfizer Inc. (NYSE:PFE) reported on April 28 a $0.40 per share quarterly, in line with previous. The dividend is payable on June 10, to shareholders of record on May 13. Pfizer Inc. (NYSE:PFE)’s dividend yield on June 1 came in at 3.06%.
According to Insider Monkey’s database for the first quarter of 2022, 79 hedge funds were long Pfizer Inc. (NYSE:PFE), compared to 83 funds in the earlier quarter. Cliff Asness’ AQR Capital Management is a significant shareholder of the company, with 10.70 million shares worth $554.12 million.
Here is what ClearBridge Investments Value Equity Strategy has to say about Pfizer Inc. (NYSE:PFE) in its Q4 2021 investor letter:
“While the level of general turnover abated as we progressed through 2021, it remained high in one area: post-COVID-19 recovery plays. The concept behind this investment thesis was, and still is, straightforward: with the advent of effective vaccines, the path from pandemic to endemic is just a matter of time. As this transition occurs, the estimated excess savings of over $2 trillion built up on U.S. consumer balance sheets will unlock dramatic pent-up demand for experiences, especially global travel. This investment case seemed especially compelling when the Pfizer vaccine positively surprised markets in November 2020. As a result, we made post-COVID-19 stocks (which were trading well below our estimate of recovery value) a sizable theme within the portfolio. We understood this to be a more aggressive tilt in positioning because it required a major improvement in demand to catalyze fundamentals and drive price toward higher business values. While we accepted that recovery would not be smooth and that it would take time to deploy vaccines both domestically and globally, we decided that recovery was the logical path of least resistance and we were being well compensated for these risks.
What we did not account for, however, was vaccine hesitancy and the risk of further infection waves. As a result, the first variant wave, Delta, was a negative surprise to both the market and our team. When the risk surfaced, we immediately updated our probability-driven models and debated how we should react. The resulting conclusion was that the recovery would be delayed and that we should reduce our exposure quickly, subsequently targeting the most aggressive recovery stocks such as cruise lines. We again acted swiftly and decisively to the positive surprise that Pfizer had delivered a high-efficacy antiviral COVID-19 pill. This pill should greatly reduce COVID-19 severity risks globally, increasing the probability of a global travel recovery in 2022. While this is still true, the emergence of the highly mutated Omicron variant set off another infection wave which spurred us to again act quickly and further reduce our risk exposure. This back-and-forth may sound exhausting, but it highlights our compulsion to act if we determine a surprise has a large enough impact on the probabilities that power our valuation-driven investment cases.”
