HRL vs MKC: Dividend Yield, Growth & Safety Comparison
Hormel Foods Corp /De/ (HRL) and Mccormick & Co Inc (MKC) are both in the Consumer Staples sector, making them natural rivals for dividend investors. HRL offers a significantly higher 4.77% yield compared to MKC's 2.61%, a gap of 2.16%. For dividend growth, HRL leads with a 5-year CAGR of 12.1% versus MKC's 7.1%. HRL holds the edge in dividend safety with a "Safe" rating. MKC is a Dividend Aristocrat with 27 years of consecutive increases.
Key Metrics Comparison
| Metric | HRL | MKC |
|---|
| Dividend Yield | 4.77% | 2.61% |
| Annual Dividend | $1.16 | $1.80 |
| 5-Year CAGR | 12.1% | 7.1% |
| Payout Ratio | 1% | 61% |
| Consecutive Years | 0 | 27 |
| Price | $23.74 | $71.91 |
Yield Comparison
Hormel Foods Corp /De/ (HRL) currently yields 4.77%, which is attractive for the broader market. That's 2.16% more than Mccormick & Co Inc (MKC), which yields 2.61%. In dollar terms, HRL pays $1.16/share annually versus MKC's $1.80/share.
Dividend Growth
Over the past five years, HRL has grown its dividend at a 12.1% CAGR compared to MKC's 7.1%. HRL: Dividend growth is accelerating — the 3-year CAGR of 18.6% exceeds the 5-year rate of 12.1% and the 10-year rate of 11.5%. MKC: Dividend growth has been steady, with a 3-year CAGR of 7.3% and a 5-year CAGR of 7.1% (10-year: 8.5%).
Dividend Safety
HRL's dividend safety is rated "Safe." The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.8x. MKC'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 1.6x. HRL's payout ratio of 1% is more conservative than MKC's 61%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in HRL generates approximately $477/year in dividend income, compared to $261/year from MKC — a difference of $216/year. At $100,000, that gap widens to $2160/year.
Verdict
- Best for income: HRL
- Best for growth: HRL
- Best for safety: HRL
Frequently Asked Questions
Which has a higher dividend yield, HRL or MKC?
Hormel Foods Corp /De/ (HRL) has a higher dividend yield of 4.77% compared to Mccormick & Co Inc (MKC) at 2.61%.
Is HRL or MKC a better dividend growth stock?
Hormel Foods Corp /De/ has the stronger dividend growth with a 5-year CAGR of 12.1%, compared to Mccormick & Co Inc's 7.1%.
Which is safer for dividend income, HRL or MKC?
Hormel Foods Corp /De/'s dividend safety is rated "Safe" while Mccormick & Co Inc is rated "Moderate." The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.8x. The payout ratio of 61% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.6x.
How much income does $10,000 in HRL vs MKC generate?
A $10,000 investment in HRL generates approximately $477/year in dividends, while the same amount in MKC generates about $261/year.
Is HRL or MKC a Dividend Aristocrat?
Mccormick & Co Inc is a Dividend Aristocrat with 27 consecutive years of increases. Hormel Foods Corp /De/ does not currently qualify for aristocrat status.
Which has a lower payout ratio, HRL or MKC?
Hormel Foods Corp /De/ has a lower payout ratio of 1% compared to Mccormick & Co Inc's 61%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
HRL vs MKC: which is better for retirement income?
It depends on your priorities. HRL for current income, HRL for dividend growth, HRL for safety. Many retirement investors hold both for diversification.
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