MCD vs PPG: Dividend Comparison
Dividend data as of
Mcdonalds Corp (MCD) from Consumer Discretionary and Ppg Industries Inc (PPG) from Materials offer different dividend profiles for income-focused portfolios. Both stocks offer similar yields — MCD at 2.17% and PPG at 2.15%. For dividend growth, MCD leads with a 5-year CAGR of 8.1% versus PPG's 5.3%. PPG holds the edge in dividend safety with a "Safe" rating. MCD is a Dividend King while PPG is a Dividend Aristocrat.
Verdict
Yield Analysis
MCD yields 0.02% more than PPG. In dollar terms, MCD pays $7.08/share vs PPG's $2.78/share annually.
Dividend Growth
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%.
PPG: Dividend growth is slowing — the 3-year CAGR of 4.6% trails the 5-year rate of 5.3% and the 10-year rate of 6.6%.
Dividend Safety
MCD: 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.
PPG: The payout ratio of 40% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.5x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in MCD vs PPG today?
At $327.89 per share, $10,000 buys about 30.5 shares of Mcdonalds Corp (MCD). Each share pays $7.08 per year in dividends, so the position starts out generating roughly $216 per year — about $18 a month.
At $131.33 per share, $10,000 buys about 76.1 shares of Ppg Industries Inc (PPG). Each share pays $2.78 per year in dividends, so the position starts out generating roughly $212 per year — about $18 a month.
On day one the two positions generate nearly identical income; the difference comes from what happens to each dividend afterward.
What could $10,000 of MCD or PPG income look like in 10 years?
Mcdonalds Corp (MCD) has raised its dividend about 8.1% a year over the past five years. If that pace held, the $217 per year that $10,000 generates today at the current 2.17% yield would reach $473 per year by 2036 — a 4.7% yield on the original cost.
Ppg Industries Inc (PPG) has raised its dividend about 5.3% a year over the past five years. If that pace held, the $215 per year that $10,000 generates today at the current 2.15% yield would reach $361 per year by 2036 — a 3.6% yield on the original cost.
On those trailing rates, MCD pays more in 2036: $473 versus $361 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
Can MCD and PPG afford their dividends?
Mcdonalds Corp (MCD) earns $11.72 per share against $7.08 paid out in dividends — 1.7x coverage (a 60% payout ratio).
Ppg Industries Inc (PPG) earns $6.92 per share against $2.78 paid out in dividends — 2.5x coverage (a 40% payout ratio).
PPG'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 MCD if earnings weaken.
Which fits an early-retirement income portfolio better, MCD or PPG?
For income you need right now, Mcdonalds Corp (MCD) leads: $100,000 invested today pays about $181 a month at the current 2.17% yield, versus $179 a month from Ppg Industries Inc (PPG) at 2.15%.
MCD also leads on dividend growth (8.1% vs 5.3% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: MCD has raised its dividend 50 consecutive years; PPG has raised its dividend 42 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 $587/yr in MCD vs $447/yr in PPG 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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