COST vs MKC: Dividend Yield, Growth & Safety Comparison
Costco Wholesale Corp /New (COST) and Mccormick & Co Inc (MKC) are both in the Consumer Staples sector, making them natural rivals for dividend investors. MKC offers a significantly higher 2.61% yield compared to COST's 0.52%, a gap of 2.09%. For dividend growth, COST leads with a 5-year CAGR of 20.9% versus MKC's 7.1%. COST holds the edge in dividend safety with a "Safe" rating. MKC is a Dividend Aristocrat with 27 years of consecutive increases.
Key Metrics Comparison
| Metric | COST | MKC |
|---|
| Dividend Yield | 0.52% | 2.61% |
| Annual Dividend | $5.06 | $1.80 |
| 5-Year CAGR | 20.9% | 7.1% |
| Payout Ratio | 27% | 61% |
| Consecutive Years | 0 | 27 |
| Price | $1015.00 | $71.91 |
Yield Comparison
Mccormick & Co Inc (MKC) currently yields 2.61%, which is solid for the broader market. That's 2.09% more than Costco Wholesale Corp /New (COST), which yields 0.52%. In dollar terms, MKC pays $1.80/share annually versus COST's $5.06/share.
Dividend Growth
Over the past five years, COST has grown its dividend at a 20.9% CAGR compared to MKC's 7.1%. COST: Dividend growth is slowing — the 3-year CAGR of -47.1% trails the 5-year rate of 20.9% and the 10-year rate of 15.8%. MKC: Dividend growth has been steady, with a 3-year CAGR of 7.3% and a 5-year CAGR of 7.1% (10-year: 8.5%).
Dividend Safety
COST's dividend safety is rated "Safe." The payout ratio of 27% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.7x. MKC's dividend safety is rated "Moderate." The payout ratio of 61% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.6x. COST's payout ratio of 27% is more conservative than MKC's 61%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in MKC generates approximately $261/year in dividend income, compared to $52/year from COST — a difference of $209/year. At $100,000, that gap widens to $2090/year.
Verdict
- Best for income: MKC
- Best for growth: COST
- Best for safety: COST
Frequently Asked Questions
Which has a higher dividend yield, COST or MKC?
Mccormick & Co Inc (MKC) has a higher dividend yield of 2.61% compared to Costco Wholesale Corp /New (COST) at 0.52%.
Is COST or MKC a better dividend growth stock?
Costco Wholesale Corp /New has the stronger dividend growth with a 5-year CAGR of 20.9%, compared to Mccormick & Co Inc's 7.1%.
Which is safer for dividend income, COST or MKC?
Costco Wholesale Corp /New's dividend safety is rated "Safe" while Mccormick & Co Inc is rated "Moderate." The payout ratio of 27% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.7x. The payout ratio of 61% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.6x.
How much income does $10,000 in COST vs MKC generate?
A $10,000 investment in COST generates approximately $52/year in dividends, while the same amount in MKC generates about $261/year.
Is COST or MKC a Dividend Aristocrat?
Mccormick & Co Inc is a Dividend Aristocrat with 27 consecutive years of increases. Costco Wholesale Corp /New does not currently qualify for aristocrat status.
Which has a lower payout ratio, COST or MKC?
Costco Wholesale Corp /New has a lower payout ratio of 27% compared to Mccormick & Co Inc's 61%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
COST vs MKC: which is better for retirement income?
It depends on your priorities. MKC for current income, COST for dividend growth, COST for safety. Many retirement investors hold both for diversification.
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