COST vs PG: Dividend Yield, Growth & Safety Comparison
Costco Wholesale Corp /New (COST) and PROCTER & GAMBLE Co (PG) are both in the Consumer Staples sector, making them natural rivals for dividend investors. PG offers a significantly higher 2.63% yield compared to COST's 0.52%, a gap of 2.10%. For dividend growth, COST leads with a 5-year CAGR of 20.9% versus PG's 12.5%. COST holds the edge in dividend safety with a "Safe" rating.
Key Metrics Comparison
| Metric | COST | PG |
|---|
| Dividend Yield | 0.52% | 2.63% |
| Annual Dividend | $5.06 | $4.18 |
| 5-Year CAGR | 20.9% | 12.5% |
| Payout Ratio | 27% | 62% |
| Consecutive Years | 0 | 0 |
| Price | $1015.00 | $160.56 |
Yield Comparison
PROCTER & GAMBLE Co (PG) currently yields 2.63%, which is solid for the broader market. That's 2.10% more than Costco Wholesale Corp /New (COST), which yields 0.52%. In dollar terms, PG pays $4.18/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 PG's 12.5%. 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%. PG: Dividend growth is accelerating — the 3-year CAGR of 21.6% exceeds the 5-year rate of 12.5% and the 10-year rate of 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. PG's dividend safety is rated "Moderate." The payout ratio of 62% 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 PG's 62%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in PG generates approximately $263/year in dividend income, compared to $52/year from COST — a difference of $211/year. At $100,000, that gap widens to $2110/year.
Verdict
- Best for income: PG
- Best for growth: COST
- Best for safety: COST
Frequently Asked Questions
Which has a higher dividend yield, COST or PG?
PROCTER & GAMBLE Co (PG) has a higher dividend yield of 2.63% compared to Costco Wholesale Corp /New (COST) at 0.52%.
Is COST or PG a better dividend growth stock?
Costco Wholesale Corp /New has the stronger dividend growth with a 5-year CAGR of 20.9%, compared to PROCTER & GAMBLE Co's 12.5%.
Which is safer for dividend income, COST or PG?
Costco Wholesale Corp /New's dividend safety is rated "Safe" while PROCTER & GAMBLE Co 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 62% 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 PG generate?
A $10,000 investment in COST generates approximately $52/year in dividends, while the same amount in PG generates about $263/year.
Which has a lower payout ratio, COST or PG?
Costco Wholesale Corp /New has a lower payout ratio of 27% compared to PROCTER & GAMBLE Co's 62%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
COST vs PG: which is better for retirement income?
It depends on your priorities. PG for current income, COST for dividend growth, COST for safety. Many retirement investors hold both for diversification.
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