DOW vs SHW: Dividend Comparison
Dividend data as of
Dow Inc. (DOW) and Sherwin Williams Co (SHW) are both in the Materials sector, making them natural rivals for dividend investors. DOW offers a significantly higher 6.25% yield compared to SHW's 0.87%, a gap of 5.38%. For dividend growth, SHW leads with a 5-year CAGR of 9.5% versus DOW's -6.9%. Both stocks carry a "Safe" dividend safety rating. SHW is a Dividend Aristocrat with 40 years of consecutive increases.
Verdict
Yield Analysis
DOW yields 5.38% more than SHW. In dollar terms, DOW pays $2.10/share vs SHW's $3.16/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%.
SHW: Dividend growth is accelerating — the 3-year CAGR of 14.3% exceeds the 5-year rate of 9.5% and the 10-year rate of 12.2%.
Dividend Safety
DOW: The payout ratio of 7% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend -1.8x.
SHW: The payout ratio of 31% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.3x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in DOW vs SHW 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 $368.50 per share, $10,000 buys about 27.1 shares of Sherwin Williams Co (SHW). Each share pays $3.16 per year in dividends, so the position starts out generating roughly $86 per year — about $7 a month.
DOW is the larger income stream from day one: $558 per year more on the same $10,000 invested.
What could $10,000 of DOW or SHW 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.
Sherwin Williams Co (SHW) has raised its dividend about 9.5% a year over the past five years. If that pace held, the $87 per year that $10,000 generates today at the current 0.87% yield would reach $214 per year by 2036 — a 2.1% yield on the original cost.
On those trailing rates, DOW pays more in 2036: $304 versus $214 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would SHW's dividend growth overtake DOW's higher yield?
Sherwin Williams Co (SHW) yields less today (0.87% vs 6.25%) but has grown its dividend faster — 9.5% vs -6.9% a year over the past five years. If both trends continued, a $10,000 position in SHW would start out-earning the same position in DOW around 2039 (roughly 13 years from now), paying about $281 per year at the crossover. Before that point, DOW pays more each year; after it, the gap compounds in SHW's favor.
Can DOW and SHW afford their dividends?
Dow Inc. (DOW) pays out about 7% of its earnings as dividends, which implies roughly 14.3x earnings coverage.
Sherwin Williams Co (SHW) earns $10.28 per share against $3.16 paid out in dividends — 3.3x coverage (a 31% 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 SHW if earnings weaken.
Which fits an early-retirement income portfolio better, DOW or SHW?
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 $72 a month from Sherwin Williams Co (SHW) at 0.87%.
With a decade or more before the income is needed, SHW's faster dividend growth (9.5% vs -6.9% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
On consistency: SHW has raised its dividend 40 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 $234/yr in SHW 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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