MCD vs SHW: Dividend Yield, Growth & Safety Comparison
Mcdonalds Corp (MCD) from Consumer Discretionary and Sherwin Williams Co (SHW) from Materials offer different dividend profiles for income-focused portfolios. MCD offers a significantly higher 2.17% yield compared to SHW's 0.87%, a gap of 1.31%. For dividend growth, SHW leads with a 5-year CAGR of 9.5% versus MCD's 8.1%. SHW holds the edge in dividend safety with a "Safe" rating. MCD is a Dividend King while SHW is a Dividend Aristocrat.
Key Metrics Comparison
| Metric | MCD | SHW |
|---|
| Dividend Yield | 2.17% | 0.87% |
| Annual Dividend | $7.08 | $3.16 |
| 5-Year CAGR | 8.1% | 9.5% |
| Payout Ratio | 60% | 31% |
| Consecutive Years | 50 | 40 |
| Price | $327.89 | $368.50 |
Yield Comparison
Mcdonalds Corp (MCD) currently yields 2.17%, which is solid for the broader market. That's 1.31% more than Sherwin Williams Co (SHW), which yields 0.87%. In dollar terms, MCD pays $7.08/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 MCD's 8.1%. 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%. 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
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. 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. SHW's payout ratio of 31% is more conservative than MCD's 60%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in MCD generates approximately $217/year in dividend income, compared to $87/year from SHW — a difference of $130/year. At $100,000, that gap widens to $1300/year.
Verdict
- Best for income: MCD
- Best for growth: SHW
- Best for safety: SHW
Frequently Asked Questions
Which has a higher dividend yield, MCD or SHW?
Mcdonalds Corp (MCD) has a higher dividend yield of 2.17% compared to Sherwin Williams Co (SHW) at 0.87%.
Is MCD 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 Mcdonalds Corp's 8.1%.
Which is safer for dividend income, MCD or SHW?
Mcdonalds Corp's dividend safety is rated "Moderate" while Sherwin Williams Co is rated "Safe." 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. 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 MCD vs SHW generate?
A $10,000 investment in MCD generates approximately $217/year in dividends, while the same amount in SHW generates about $87/year.
Is MCD or SHW a Dividend Aristocrat?
Mcdonalds Corp is a Dividend King (50 years) and Sherwin Williams Co is a Dividend Aristocrat (40 years).
Which has a lower payout ratio, MCD or SHW?
Sherwin Williams Co has a lower payout ratio of 31% compared to Mcdonalds Corp's 60%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
MCD vs SHW: which is better for retirement income?
It depends on your priorities. MCD for current income, SHW for dividend growth, SHW for safety. Many retirement investors hold both for diversification.
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