DOW vs SHW: Dividend Yield, Growth & Safety Comparison
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.
Key Metrics Comparison
| Metric | DOW | SHW |
|---|
| Dividend Yield | 6.25% | 0.87% |
| Annual Dividend | $2.10 | $3.16 |
| 5-Year CAGR | -6.9% | 9.5% |
| Payout Ratio | 7% | 31% |
| Consecutive Years | 0 | 40 |
| Price | $32.60 | $368.50 |
Yield Comparison
Dow Inc. (DOW) currently yields 6.25%, which is attractive for the broader market. That's 5.38% more than Sherwin Williams Co (SHW), which yields 0.87%. In dollar terms, DOW pays $2.10/share annually versus SHW's $3.16/share.
Dividend Growth
Over the past five years, SHW has grown its dividend at a 9.5% 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%. 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'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. SHW's dividend safety is rated "Safe." The payout ratio of 31% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.3x. DOW's payout ratio of 7% is more conservative than SHW's 31%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in DOW generates approximately $625/year in dividend income, compared to $87/year from SHW — a difference of $538/year. At $100,000, that gap widens to $5380/year.
Verdict
- Best for income: DOW
- Best for growth: SHW
- Best for safety: DOW
Frequently Asked Questions
Which has a higher dividend yield, DOW or SHW?
Dow Inc. (DOW) has a higher dividend yield of 6.25% compared to Sherwin Williams Co (SHW) at 0.87%.
Is DOW or SHW a better dividend growth stock?
Sherwin Williams Co has the stronger dividend growth with a 5-year CAGR of 9.5%, compared to Dow Inc.'s -6.9%.
Which is safer for dividend income, DOW or SHW?
Dow Inc.'s dividend safety is rated "Safe" while Sherwin Williams Co 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 31% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.3x.
How much income does $10,000 in DOW vs SHW generate?
A $10,000 investment in DOW generates approximately $625/year in dividends, while the same amount in SHW generates about $87/year.
Is DOW or SHW a Dividend Aristocrat?
Sherwin Williams Co is a Dividend Aristocrat with 40 consecutive years of increases. Dow Inc. does not currently qualify for aristocrat status.
Which has a lower payout ratio, DOW or SHW?
Dow Inc. has a lower payout ratio of 7% compared to Sherwin Williams Co's 31%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
DOW vs SHW: which is better for retirement income?
It depends on your priorities. DOW for current income, SHW for dividend growth, DOW for safety. Many retirement investors hold both for diversification.
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