KO vs MCD: Dividend Yield, Growth & Safety Comparison
Coca Cola Co (KO) from Consumer Staples and Mcdonalds Corp (MCD) from Consumer Discretionary offer different dividend profiles for income-focused portfolios. KO edges ahead on yield at 2.58% versus MCD's 2.17%. For dividend growth, MCD leads with a 5-year CAGR of 8.1% versus KO's 5.0%. Both stocks carry a "Moderate" dividend safety rating. KO is a Dividend Contender while MCD is a Dividend King.
Key Metrics Comparison
| Metric | KO | MCD |
|---|
| Dividend Yield | 2.58% | 2.17% |
| Annual Dividend | $2.04 | $7.08 |
| 5-Year CAGR | 5.0% | 8.1% |
| Payout Ratio | 67% | 60% |
| Consecutive Years | 23 | 50 |
| Price | $78.74 | $327.89 |
Yield Comparison
Coca Cola Co (KO) currently yields 2.58%, which is solid for the broader market. That's 0.41% more than Mcdonalds Corp (MCD), which yields 2.17%. In dollar terms, KO pays $2.04/share annually versus MCD's $7.08/share.
Dividend Growth
Over the past five years, MCD has grown its dividend at a 8.1% CAGR compared to KO's 5.0%. KO: Dividend growth has been steady, with a 3-year CAGR of 5.3% and a 5-year CAGR of 5.0% (10-year: 4.3%). MCD: Dividend growth is slowing — the 3-year CAGR of 7.3% trails the 5-year rate of 8.1% and the 10-year rate of 7.9%.
Dividend Safety
KO's dividend safety is rated "Moderate." The payout ratio of 67% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.5x. MCD's dividend safety is rated "Moderate." The payout ratio of 60% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.7x. MCD's payout ratio of 60% is more conservative than KO's 67%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in KO generates approximately $258/year in dividend income, compared to $217/year from MCD — a difference of $41/year. At $100,000, that gap widens to $410/year.
Verdict
- Best for income: KO
- Best for growth: MCD
- Best for safety: MCD
Frequently Asked Questions
Which has a higher dividend yield, KO or MCD?
Coca Cola Co (KO) has a higher dividend yield of 2.58% compared to Mcdonalds Corp (MCD) at 2.17%.
Is KO or MCD a better dividend growth stock?
Mcdonalds Corp has the stronger dividend growth with a 5-year CAGR of 8.1%, compared to Coca Cola Co's 5.0%.
Which is safer for dividend income, KO or MCD?
Coca Cola Co's dividend safety is rated "Moderate" while Mcdonalds Corp is rated "Moderate." The payout ratio of 67% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.5x. The payout ratio of 60% 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 KO vs MCD generate?
A $10,000 investment in KO generates approximately $258/year in dividends, while the same amount in MCD generates about $217/year.
Is KO or MCD a Dividend Aristocrat?
Coca Cola Co is a Dividend Contender (23 years) and Mcdonalds Corp is a Dividend King (50 years).
Which has a lower payout ratio, KO or MCD?
Mcdonalds Corp has a lower payout ratio of 60% compared to Coca Cola Co's 67%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
KO vs MCD: which is better for retirement income?
It depends on your priorities. KO for current income, MCD for dividend growth, MCD for safety. Many retirement investors hold both for diversification.
KO Dividend Analysis | MCD Dividend Analysis | All Comparisons | Comparison Tool