COST vs SYY: Dividend Yield, Growth & Safety Comparison
Costco Wholesale Corp /New (COST) and Sysco Corp (SYY) are both in the Consumer Staples sector, making them natural rivals for dividend investors. SYY offers a significantly higher 2.43% yield compared to COST's 0.52%, a gap of 1.91%. For dividend growth, COST leads with a 5-year CAGR of 20.9% versus SYY's 10.9%. Both stocks carry a "Safe" dividend safety rating.
Key Metrics Comparison
| Metric | COST | SYY |
|---|
| Dividend Yield | 0.52% | 2.43% |
| Annual Dividend | $5.06 | $2.13 |
| 5-Year CAGR | 20.9% | 10.9% |
| Payout Ratio | 27% | 57% |
| Consecutive Years | 0 | 0 |
| Price | $1015.00 | $90.70 |
Yield Comparison
Sysco Corp (SYY) currently yields 2.43%, which is solid for the broader market. That's 1.91% more than Costco Wholesale Corp /New (COST), which yields 0.52%. In dollar terms, SYY pays $2.13/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 SYY's 10.9%. 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%. SYY: Dividend growth is accelerating — the 3-year CAGR of 18.7% exceeds the 5-year rate of 10.9% and the 10-year rate of 9.5%.
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. SYY's dividend safety is rated "Safe." The payout ratio of 57% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.7x. COST's payout ratio of 27% is more conservative than SYY's 57%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in SYY generates approximately $243/year in dividend income, compared to $52/year from COST — a difference of $191/year. At $100,000, that gap widens to $1910/year.
Verdict
- Best for income: SYY
- Best for growth: COST
- Best for safety: COST
Frequently Asked Questions
Which has a higher dividend yield, COST or SYY?
Sysco Corp (SYY) has a higher dividend yield of 2.43% compared to Costco Wholesale Corp /New (COST) at 0.52%.
Is COST or SYY a better dividend growth stock?
Costco Wholesale Corp /New has the stronger dividend growth with a 5-year CAGR of 20.9%, compared to Sysco Corp's 10.9%.
Which is safer for dividend income, COST or SYY?
Costco Wholesale Corp /New's dividend safety is rated "Safe" while Sysco Corp is rated "Safe." 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 57% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.7x.
How much income does $10,000 in COST vs SYY generate?
A $10,000 investment in COST generates approximately $52/year in dividends, while the same amount in SYY generates about $243/year.
Which has a lower payout ratio, COST or SYY?
Costco Wholesale Corp /New has a lower payout ratio of 27% compared to Sysco Corp's 57%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
COST vs SYY: which is better for retirement income?
It depends on your priorities. SYY for current income, COST for dividend growth, COST for safety. Many retirement investors hold both for diversification.
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