DOV vs MCD: Dividend Comparison
Dividend data as of
DOVER Corp (DOV) from Industrials and Mcdonalds Corp (MCD) from Consumer Discretionary offer different dividend profiles for income-focused portfolios. MCD offers a significantly higher 2.17% yield compared to DOV's 0.90%, a gap of 1.27%. For dividend growth, MCD leads with a 5-year CAGR of 8.1% versus DOV's 1.0%. DOV holds the edge in dividend safety with a "Safe" rating. DOV is a Dividend Aristocrat while MCD is a Dividend King.
Verdict
Yield Analysis
MCD yields 1.27% more than DOV. In dollar terms, DOV pays $2.08/share vs MCD's $7.08/share annually.
Dividend Growth
DOV: Dividend growth has been steady, with a 3-year CAGR of 1.0% and a 5-year CAGR of 1.0% (10-year: 4.5%).
MCD: Dividend growth is slowing — the 3-year CAGR of 7.3% trails the 5-year rate of 8.1% and the 10-year rate of 7.9%.
Dividend Safety
DOV: The payout ratio of 26% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.8x.
MCD: The payout ratio of 60% 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 DOV vs MCD today?
At $231.16 per share, $10,000 buys about 43.3 shares of DOVER Corp (DOV). Each share pays $2.08 per year in dividends, so the position starts out generating roughly $90 per year — about $7 a month.
At $327.89 per share, $10,000 buys about 30.5 shares of Mcdonalds Corp (MCD). Each share pays $7.08 per year in dividends, so the position starts out generating roughly $216 per year — about $18 a month.
MCD is the larger income stream from day one: $126 per year more on the same $10,000 invested.
What could $10,000 of DOV or MCD income look like in 10 years?
DOVER Corp (DOV) has raised its dividend about 1.0% a year over the past five years. If that pace held, the $90 per year that $10,000 generates today at the current 0.90% yield would reach $99 per year by 2036 — a 1.0% yield on the original cost.
Mcdonalds Corp (MCD) has raised its dividend about 8.1% a year over the past five years. If that pace held, the $217 per year that $10,000 generates today at the current 2.17% yield would reach $473 per year by 2036 — a 4.7% yield on the original cost.
On those trailing rates, MCD pays more in 2036: $473 versus $99 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would DOV's dividend growth overtake MCD's higher yield?
It doesn't, on the trailing numbers. Mcdonalds Corp (MCD) yields more today (2.17% vs 0.90%) and has also grown its dividend at least as fast (8.1% vs 1.0% a year over five years). Unless DOV accelerates its raises or MCD stumbles, DOV never closes the income gap — MCD wins on both current income and growth.
Can DOV and MCD afford their dividends?
DOVER Corp (DOV) earns $7.98 per share against $2.08 paid out in dividends — 3.8x coverage (a 26% payout ratio).
Mcdonalds Corp (MCD) earns $11.72 per share against $7.08 paid out in dividends — 1.7x coverage (a 60% payout ratio).
DOV'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 MCD if earnings weaken.
Which fits an early-retirement income portfolio better, DOV or MCD?
For income you need right now, Mcdonalds Corp (MCD) leads: $100,000 invested today pays about $181 a month at the current 2.17% yield, versus $75 a month from DOVER Corp (DOV) at 0.90%.
MCD also leads on dividend growth (8.1% vs 1.0% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: DOV has raised its dividend 41 consecutive years; MCD has raised its dividend 50 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 $109/yr in DOV vs $587/yr in MCD 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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