GWW vs HON: Dividend Yield, Growth & Safety Comparison
W.W. Grainger, Inc. (GWW) and Honeywell International Inc (HON) are both in the Industrials sector, making them natural rivals for dividend investors. HON offers a significantly higher 1.88% yield compared to GWW's 0.74%, a gap of 1.14%. For dividend growth, GWW leads with a 5-year CAGR of 16.1% versus HON's 5.4%. GWW holds the edge in dividend safety with a "Safe" rating. HON is a Dividend Contender with 15 years of consecutive increases.
Key Metrics Comparison
| Metric | GWW | HON |
|---|
| Dividend Yield | 0.74% | 1.88% |
| Annual Dividend | $8.83 | $4.58 |
| 5-Year CAGR | 16.1% | 5.4% |
| Payout Ratio | 25% | 61% |
| Consecutive Years | 0 | 15 |
| Price | $1139.68 | $241.59 |
Yield Comparison
Honeywell International Inc (HON) currently yields 1.88%, which is modest for the broader market. That's 1.14% more than W.W. Grainger, Inc. (GWW), which yields 0.74%. In dollar terms, HON pays $4.58/share annually versus GWW's $8.83/share.
Dividend Growth
Over the past five years, GWW has grown its dividend at a 16.1% CAGR compared to HON's 5.4%. GWW: Dividend growth is accelerating — the 3-year CAGR of 25.8% exceeds the 5-year rate of 16.1% and the 10-year rate of 10.3%. HON: Dividend growth has been steady, with a 3-year CAGR of 5.6% and a 5-year CAGR of 5.4% (10-year: 7.9%).
Dividend Safety
GWW's dividend safety is rated "Safe." The payout ratio of 25% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 4.0x. HON's dividend safety is rated "Moderate." The payout ratio of 61% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.7x. GWW's payout ratio of 25% is more conservative than HON's 61%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in HON generates approximately $188/year in dividend income, compared to $74/year from GWW — a difference of $114/year. At $100,000, that gap widens to $1140/year.
Verdict
- Best for income: HON
- Best for growth: GWW
- Best for safety: GWW
Frequently Asked Questions
Which has a higher dividend yield, GWW or HON?
Honeywell International Inc (HON) has a higher dividend yield of 1.88% compared to W.W. Grainger, Inc. (GWW) at 0.74%.
Is GWW or HON a better dividend growth stock?
W.W. Grainger, Inc. has the stronger dividend growth with a 5-year CAGR of 16.1%, compared to Honeywell International Inc's 5.4%.
Which is safer for dividend income, GWW or HON?
W.W. Grainger, Inc.'s dividend safety is rated "Safe" while Honeywell International Inc is rated "Moderate." The payout ratio of 25% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 4.0x. The payout ratio of 61% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.7x.
How much income does $10,000 in GWW vs HON generate?
A $10,000 investment in GWW generates approximately $74/year in dividends, while the same amount in HON generates about $188/year.
Is GWW or HON a Dividend Aristocrat?
Honeywell International Inc is a Dividend Contender with 15 consecutive years of increases. W.W. Grainger, Inc. does not currently qualify for aristocrat status.
Which has a lower payout ratio, GWW or HON?
W.W. Grainger, Inc. has a lower payout ratio of 25% compared to Honeywell International Inc's 61%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
GWW vs HON: which is better for retirement income?
It depends on your priorities. HON for current income, GWW for dividend growth, GWW for safety. Many retirement investors hold both for diversification.
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