DE vs UNP: Dividend Comparison
Dividend data as of
Deere & Co (DE) and Union Pacific Corp (UNP) are both in the Industrials sector, making them natural rivals for dividend investors. UNP edges ahead on yield at 2.08% versus DE's 1.09%. For dividend growth, DE leads with a 5-year CAGR of 13.5% versus UNP's 6.1%. Both stocks carry a "Safe" dividend safety rating. DE is a Dividend Challenger while UNP is a Dividend Contender.
Verdict
Yield Analysis
UNP yields 0.99% more than DE. In dollar terms, DE pays $6.48/share vs UNP's $5.44/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%.
UNP: Dividend growth is slowing — the 3-year CAGR of 2.3% trails the 5-year rate of 6.1% and the 10-year rate of 10.3%.
Dividend Safety
DE: The payout ratio of 35% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.9x.
UNP: The payout ratio of 45% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.2x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in DE vs UNP 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 $260.92 per share, $10,000 buys about 38.3 shares of Union Pacific Corp (UNP). Each share pays $5.44 per year in dividends, so the position starts out generating roughly $208 per year — about $17 a month.
UNP is the larger income stream from day one: $102 per year more on the same $10,000 invested.
What could $10,000 of DE or UNP 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.
Union Pacific Corp (UNP) has raised its dividend about 6.1% a year over the past five years. If that pace held, the $208 per year that $10,000 generates today at the current 2.08% yield would reach $377 per year by 2036 — a 3.8% yield on the original cost.
On those trailing rates, DE pays more in 2036: $388 versus $377 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 UNP's higher yield?
Deere & Co (DE) yields less today (1.09% vs 2.08%) but has grown its dividend faster — 13.5% vs 6.1% 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 UNP around 2036 (roughly 10 years from now), paying about $388 per year at the crossover. Before that point, UNP pays more each year; after it, the gap compounds in DE's favor.
Can DE and UNP 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).
Union Pacific Corp (UNP) earns $11.98 per share against $5.44 paid out in dividends — 2.2x coverage (a 45% 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 UNP if earnings weaken.
Which fits an early-retirement income portfolio better, DE or UNP?
For income you need right now, Union Pacific Corp (UNP) leads: $100,000 invested today pays about $173 a month at the current 2.08% 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 6.1% 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; UNP has raised its dividend 19 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 $463/yr in UNP 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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