COST vs WMT: Dividend Yield, Growth & Safety Comparison
Costco Wholesale Corp /New (COST) and Walmart Inc. (WMT) are both in the Consumer Staples sector, making them natural rivals for dividend investors. Both stocks offer similar yields — COST at 0.52% and WMT at 0.72%. For dividend growth, COST leads with a 5-year CAGR of 20.9% versus WMT's 6.4%. Both stocks carry a "Safe" dividend safety rating. WMT is a Dividend Aristocrat with 43 years of consecutive increases.
Key Metrics Comparison
| Metric | COST | WMT |
|---|
| Dividend Yield | 0.52% | 0.72% |
| Annual Dividend | $5.06 | $0.91 |
| 5-Year CAGR | 20.9% | 6.4% |
| Payout Ratio | 27% | 32% |
| Consecutive Years | 0 | 43 |
| Price | $1015.00 | $133.79 |
Yield Comparison
Walmart Inc. (WMT) currently yields 0.72%, which is very low for the broader market. That's 0.20% more than Costco Wholesale Corp /New (COST), which yields 0.52%. In dollar terms, WMT pays $0.91/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 WMT's 6.4%. 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%. WMT: Dividend growth is accelerating — the 3-year CAGR of 11.2% exceeds the 5-year rate of 6.4% and the 10-year rate of 3.9%.
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. WMT's dividend safety is rated "Safe." The payout ratio of 32% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.1x. Both have similar payout ratios — COST at 27% and WMT at 32%.
Income Comparison
A $10,000 investment in WMT generates approximately $72/year in dividend income, compared to $52/year from COST — a difference of $20/year. At $100,000, that gap widens to $200/year.
Verdict
- Best for income: WMT
- Best for growth: COST
- Best for safety: COST
Frequently Asked Questions
Which has a higher dividend yield, COST or WMT?
Walmart Inc. (WMT) has a higher dividend yield of 0.72% compared to Costco Wholesale Corp /New (COST) at 0.52%.
Is COST or WMT a better dividend growth stock?
Costco Wholesale Corp /New has the stronger dividend growth with a 5-year CAGR of 20.9%, compared to Walmart Inc.'s 6.4%.
Which is safer for dividend income, COST or WMT?
Costco Wholesale Corp /New's dividend safety is rated "Safe" while Walmart Inc. 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 32% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.1x.
How much income does $10,000 in COST vs WMT generate?
A $10,000 investment in COST generates approximately $52/year in dividends, while the same amount in WMT generates about $72/year.
Is COST or WMT a Dividend Aristocrat?
Walmart Inc. is a Dividend Aristocrat with 43 consecutive years of increases. Costco Wholesale Corp /New does not currently qualify for aristocrat status.
Which has a lower payout ratio, COST or WMT?
Costco Wholesale Corp /New has a lower payout ratio of 27% compared to Walmart Inc.'s 32%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
COST vs WMT: which is better for retirement income?
It depends on your priorities. WMT for current income, COST for dividend growth, COST for safety. Many retirement investors hold both for diversification.
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