MCD vs WMT: Dividend Yield, Growth & Safety Comparison
Mcdonalds Corp (MCD) from Consumer Discretionary and Walmart Inc. (WMT) from Consumer Staples offer different dividend profiles for income-focused portfolios. MCD offers a significantly higher 2.17% yield compared to WMT's 0.72%, a gap of 1.45%. For dividend growth, MCD leads with a 5-year CAGR of 8.1% versus WMT's 6.4%. WMT holds the edge in dividend safety with a "Safe" rating. MCD is a Dividend King while WMT is a Dividend Aristocrat.
Key Metrics Comparison
| Metric | MCD | WMT |
|---|
| Dividend Yield | 2.17% | 0.72% |
| Annual Dividend | $7.08 | $0.91 |
| 5-Year CAGR | 8.1% | 6.4% |
| Payout Ratio | 60% | 32% |
| Consecutive Years | 50 | 43 |
| Price | $327.89 | $133.79 |
Yield Comparison
Mcdonalds Corp (MCD) currently yields 2.17%, which is solid for the broader market. That's 1.45% more than Walmart Inc. (WMT), which yields 0.72%. In dollar terms, MCD pays $7.08/share annually versus WMT's $0.91/share.
Dividend Growth
Over the past five years, MCD has grown its dividend at a 8.1% CAGR compared to WMT's 6.4%. 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%. WMT: Dividend growth is accelerating — the 3-year CAGR of 11.2% exceeds the 5-year rate of 6.4% and the 10-year rate of 3.9%.
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. WMT's dividend safety is rated "Safe." The payout ratio of 32% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.1x. WMT's payout ratio of 32% 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 $72/year from WMT — a difference of $145/year. At $100,000, that gap widens to $1450/year.
Verdict
- Best for income: MCD
- Best for growth: MCD
- Best for safety: WMT
Frequently Asked Questions
Which has a higher dividend yield, MCD or WMT?
Mcdonalds Corp (MCD) has a higher dividend yield of 2.17% compared to Walmart Inc. (WMT) at 0.72%.
Is MCD or WMT a better dividend growth stock?
Mcdonalds Corp has the stronger dividend growth with a 5-year CAGR of 8.1%, compared to Walmart Inc.'s 6.4%.
Which is safer for dividend income, MCD or WMT?
Mcdonalds Corp's dividend safety is rated "Moderate" while Walmart Inc. 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 32% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.1x.
How much income does $10,000 in MCD vs WMT generate?
A $10,000 investment in MCD generates approximately $217/year in dividends, while the same amount in WMT generates about $72/year.
Is MCD or WMT a Dividend Aristocrat?
Mcdonalds Corp is a Dividend King (50 years) and Walmart Inc. is a Dividend Aristocrat (43 years).
Which has a lower payout ratio, MCD or WMT?
Walmart Inc. has a lower payout ratio of 32% compared to Mcdonalds Corp's 60%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
MCD vs WMT: which is better for retirement income?
It depends on your priorities. MCD for current income, MCD for dividend growth, WMT for safety. Many retirement investors hold both for diversification.
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