DOW vs LYB: Dividend Yield, Growth & Safety Comparison
Dow Inc. (DOW) and LyondellBasell Industries N.V. (LYB) are both in the Materials sector, making them natural rivals for dividend investors. LYB offers a significantly higher 9.40% yield compared to DOW's 6.25%, a gap of 3.15%. For dividend growth, LYB leads with a 5-year CAGR of 5.3% versus DOW's -6.9%. Both stocks carry a "Safe" dividend safety rating.
Key Metrics Comparison
| Metric | DOW | LYB |
|---|
| Dividend Yield | 6.25% | 9.40% |
| Annual Dividend | $2.10 | $5.42 |
| 5-Year CAGR | -6.9% | 5.3% |
| Payout Ratio | 7% | 11% |
| Consecutive Years | 0 | 2 |
| Price | $32.60 | $57.80 |
Yield Comparison
LyondellBasell Industries N.V. (LYB) currently yields 9.40%, which is high for the broader market. That's 3.15% more than Dow Inc. (DOW), which yields 6.25%. In dollar terms, LYB pays $5.42/share annually versus DOW's $2.10/share.
Dividend Growth
Over the past five years, LYB has grown its dividend at a 5.3% CAGR compared to DOW's -6.9%. DOW: Dividend growth is slowing — the 3-year CAGR of -13.4% trails the 5-year rate of -6.9% and the 10-year rate of 0.0%. LYB: Dividend growth has been steady, with a 3-year CAGR of 5.0% and a 5-year CAGR of 5.3% (10-year: 5.6%).
Dividend Safety
DOW's dividend safety is rated "Safe." The payout ratio of 7% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend -1.8x. LYB's dividend safety is rated "Safe." The payout ratio of 11% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend -0.7x. Both have similar payout ratios — DOW at 7% and LYB at 11%.
Income Comparison
A $10,000 investment in LYB generates approximately $940/year in dividend income, compared to $625/year from DOW — a difference of $315/year. At $100,000, that gap widens to $3150/year.
Verdict
- Best for income: LYB
- Best for growth: LYB
- Best for safety: DOW
Frequently Asked Questions
Which has a higher dividend yield, DOW or LYB?
LyondellBasell Industries N.V. (LYB) has a higher dividend yield of 9.40% compared to Dow Inc. (DOW) at 6.25%.
Is DOW or LYB a better dividend growth stock?
LyondellBasell Industries N.V. has the stronger dividend growth with a 5-year CAGR of 5.3%, compared to Dow Inc.'s -6.9%.
Which is safer for dividend income, DOW or LYB?
Dow Inc.'s dividend safety is rated "Safe" while LyondellBasell Industries N.V. is rated "Safe." The payout ratio of 7% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend -1.8x. The payout ratio of 11% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend -0.7x.
How much income does $10,000 in DOW vs LYB generate?
A $10,000 investment in DOW generates approximately $625/year in dividends, while the same amount in LYB generates about $940/year.
Which has a lower payout ratio, DOW or LYB?
Dow Inc. has a lower payout ratio of 7% compared to LyondellBasell Industries N.V.'s 11%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
DOW vs LYB: which is better for retirement income?
It depends on your priorities. LYB for current income, LYB for dividend growth, DOW for safety. Many retirement investors hold both for diversification.
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