MCD vs WMT: Dividend Comparison
Dividend data as of
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.
Verdict
Yield Analysis
MCD yields 1.45% more than WMT. In dollar terms, MCD pays $7.08/share vs WMT's $0.91/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%.
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: 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: The payout ratio of 32% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.1x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in MCD vs WMT 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 $133.79 per share, $10,000 buys about 74.7 shares of Walmart Inc. (WMT). Each share pays $0.91 per year in dividends, so the position starts out generating roughly $68 per year — about $6 a month.
MCD is the larger income stream from day one: $148 per year more on the same $10,000 invested.
What could $10,000 of MCD or WMT 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.
Walmart Inc. (WMT) has raised its dividend about 6.4% a year over the past five years. If that pace held, the $72 per year that $10,000 generates today at the current 0.72% yield would reach $134 per year by 2036 — a 1.3% yield on the original cost.
On those trailing rates, MCD pays more in 2036: $473 versus $134 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would WMT's dividend growth overtake MCD's higher yield?
It doesn't, on the trailing numbers. Mcdonalds Corp (MCD) yields more today (2.17% vs 0.72%) and has also grown its dividend at least as fast (8.1% vs 6.4% a year over five years). Unless WMT accelerates its raises or MCD stumbles, WMT never closes the income gap — MCD wins on both current income and growth.
Can MCD and WMT 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).
Walmart Inc. (WMT) earns $2.86 per share against $0.91 paid out in dividends — 3.1x coverage (a 32% payout ratio).
WMT'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 WMT?
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 $60 a month from Walmart Inc. (WMT) at 0.72%.
MCD also leads on dividend growth (8.1% vs 6.4% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: MCD has raised its dividend 50 consecutive years; WMT has raised its dividend 43 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 $144/yr in WMT 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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