DOW vs NUE: Dividend Comparison
Dividend data as of
Dow Inc. (DOW) and Nucor Corp (NUE) are both in the Materials sector, making them natural rivals for dividend investors. DOW offers a significantly higher 6.25% yield compared to NUE's 1.15%, a gap of 5.10%. For dividend growth, NUE leads with a 5-year CAGR of 6.5% versus DOW's -6.9%. Both stocks carry a "Safe" dividend safety rating. NUE is a Dividend Contender with 16 years of consecutive increases.
Verdict
Yield Analysis
DOW yields 5.10% more than NUE. In dollar terms, DOW pays $2.10/share vs NUE's $2.21/share annually.
Dividend Growth
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%.
NUE: Dividend growth is slowing — the 3-year CAGR of 3.3% trails the 5-year rate of 6.5% and the 10-year rate of 4.4%.
Dividend Safety
DOW: The payout ratio of 7% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend -1.8x.
NUE: The payout ratio of 29% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.4x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in DOW vs NUE today?
At $32.60 per share, $10,000 buys about 306.7 shares of Dow Inc. (DOW). Each share pays $2.10 per year in dividends, so the position starts out generating roughly $644 per year — about $54 a month.
At $182.61 per share, $10,000 buys about 54.8 shares of Nucor Corp (NUE). Each share pays $2.21 per year in dividends, so the position starts out generating roughly $121 per year — about $10 a month.
DOW is the larger income stream from day one: $523 per year more on the same $10,000 invested.
What could $10,000 of DOW or NUE income look like in 10 years?
Dow Inc. (DOW)'s dividend has shrunk about 6.9% a year over the past five years. If that trend continued, today's $625 per year on $10,000 (at the current 6.25% yield) would fall to $304 per year by 2036.
Nucor Corp (NUE) has raised its dividend about 6.5% a year over the past five years. If that pace held, the $115 per year that $10,000 generates today at the current 1.15% yield would reach $217 per year by 2036 — a 2.2% yield on the original cost.
On those trailing rates, DOW pays more in 2036: $304 versus $217 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would NUE's dividend growth overtake DOW's higher yield?
Nucor Corp (NUE) yields less today (1.15% vs 6.25%) but has grown its dividend faster — 6.5% vs -6.9% a year over the past five years. If both trends continued, a $10,000 position in NUE would start out-earning the same position in DOW around 2039 (roughly 13 years from now), paying about $262 per year at the crossover. Before that point, DOW pays more each year; after it, the gap compounds in NUE's favor.
Can DOW and NUE afford their dividends?
Dow Inc. (DOW) pays out about 7% of its earnings as dividends, which implies roughly 14.3x earnings coverage.
Nucor Corp (NUE) earns $7.51 per share against $2.21 paid out in dividends — 3.4x coverage (a 29% payout ratio).
DOW'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 NUE if earnings weaken.
Which fits an early-retirement income portfolio better, DOW or NUE?
For income you need right now, Dow Inc. (DOW) leads: $100,000 invested today pays about $521 a month at the current 6.25% yield, versus $96 a month from Nucor Corp (NUE) at 1.15%.
With a decade or more before the income is needed, NUE's faster dividend growth (6.5% vs -6.9% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
On consistency: NUE has raised its dividend 16 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 $558/yr in DOW vs $243/yr in NUE 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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