Summary

• The 4-Factor Dividend Growth Portfolio, a rules-based strategy inspired by SCHD, has delivered a 13.30% annualized return since inception, outperforming SCHD by 1.28%.
• I select stocks based on Free Cash Flow to Debt, 5-Year Dividend Growth Rate, Return on Invested Capital, and Forward Dividend Yield, equally weighted.
• Recent SCHD momentum in 2026 has narrowed the performance gap, but the 4-Factor strategy maintains a long-term alpha and aims for a 12%+ CAGR.
• I've discontinued an expected return variant and now test a Quality/Value ROC-PEG approach alongside the original, with monthly and annual rebalancing for robust performance.

4-Factor Dividend Growth Portfolio

The 4-Factor Dividend Growth Strategy is an alternative investment strategy to the popular Schwab US Dividend Equity ETF (SCHD). Think of it as having your own custom-tailored version of SCHD

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of ACN, ADP, JKHY, FAST, BMI, MRK, KLAC, AMAT, MA, MCO, NVDA, LLY, MCK, LRCX, MSFT, V, RELX, WING, INTU, MSCI, AVGO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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