DE vs HON: Dividend Comparison
Dividend data as of
Deere & Co (DE) and Honeywell International Inc (HON) are both in the Industrials sector, making them natural rivals for dividend investors. HON edges ahead on yield at 1.88% versus DE's 1.09%. For dividend growth, DE leads with a 5-year CAGR of 13.5% versus HON's 5.4%. DE holds the edge in dividend safety with a "Safe" rating. DE is a Dividend Challenger while HON is a Dividend Contender.
Verdict
Yield Analysis
HON yields 0.79% more than DE. In dollar terms, DE pays $6.48/share vs HON's $4.58/share annually.
Dividend Growth
DE: Dividend growth is slowing — the 3-year CAGR of 10.4% trails the 5-year rate of 13.5% and the 10-year rate of 11.7%.
HON: Dividend growth has been steady, with a 3-year CAGR of 5.6% and a 5-year CAGR of 5.4% (10-year: 7.9%).
Dividend Safety
DE: The payout ratio of 35% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.9x.
HON: The payout ratio of 61% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.7x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in DE vs HON today?
At $606.06 per share, $10,000 buys about 16.5 shares of Deere & Co (DE). Each share pays $6.48 per year in dividends, so the position starts out generating roughly $107 per year — about $9 a month.
At $241.59 per share, $10,000 buys about 41.4 shares of Honeywell International Inc (HON). Each share pays $4.58 per year in dividends, so the position starts out generating roughly $190 per year — about $16 a month.
HON is the larger income stream from day one: $83 per year more on the same $10,000 invested.
What could $10,000 of DE or HON income look like in 10 years?
Deere & Co (DE) has raised its dividend about 13.5% a year over the past five years. If that pace held, the $109 per year that $10,000 generates today at the current 1.09% yield would reach $388 per year by 2036 — a 3.9% yield on the original cost.
Honeywell International Inc (HON) has raised its dividend about 5.4% a year over the past five years. If that pace held, the $188 per year that $10,000 generates today at the current 1.88% yield would reach $318 per year by 2036 — a 3.2% yield on the original cost.
On those trailing rates, DE pays more in 2036: $388 versus $318 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would DE's dividend growth overtake HON's higher yield?
Deere & Co (DE) yields less today (1.09% vs 1.88%) but has grown its dividend faster — 13.5% vs 5.4% a year over the past five years. If both trends continued, a $10,000 position in DE would start out-earning the same position in HON around 2034 (roughly 8 years from now), paying about $301 per year at the crossover. Before that point, HON pays more each year; after it, the gap compounds in DE's favor.
Can DE and HON afford their dividends?
Deere & Co (DE) earns $18.51 per share against $6.48 paid out in dividends — 2.9x coverage (a 35% payout ratio).
Honeywell International Inc (HON) earns $7.58 per share against $4.58 paid out in dividends — 1.7x coverage (a 61% payout ratio).
DE's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for HON if earnings weaken.
Which fits an early-retirement income portfolio better, DE or HON?
For income you need right now, Honeywell International Inc (HON) leads: $100,000 invested today pays about $157 a month at the current 1.88% yield, versus $91 a month from Deere & Co (DE) at 1.09%.
With a decade or more before the income is needed, DE's faster dividend growth (13.5% vs 5.4% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
On consistency: DE has raised its dividend 5 consecutive years; HON has raised its dividend 15 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $433/yr in DE vs $384/yr in HON by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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