MCD vs XOM: Dividend Yield, Growth & Safety Comparison
Mcdonalds Corp (MCD) from Consumer Discretionary and Exxon Mobil Corp (XOM) from Energy offer different dividend profiles for income-focused portfolios. XOM edges ahead on yield at 2.64% versus MCD's 2.17%. For dividend growth, XOM leads with a 5-year CAGR of 11.2% versus MCD's 8.1%. XOM holds the edge in dividend safety with a "Safe" rating. MCD is a Dividend King while XOM is a Dividend Aristocrat.
Key Metrics Comparison
| Metric | MCD | XOM |
|---|
| Dividend Yield | 2.17% | 2.64% |
| Annual Dividend | $7.08 | $4.00 |
| 5-Year CAGR | 8.1% | 11.2% |
| Payout Ratio | 60% | 60% |
| Consecutive Years | 50 | 42 |
| Price | $327.89 | $148.59 |
Yield Comparison
Exxon Mobil Corp (XOM) currently yields 2.64%, which is solid for the broader market. That's 0.47% more than Mcdonalds Corp (MCD), which yields 2.17%. In dollar terms, XOM pays $4.00/share annually versus MCD's $7.08/share.
Dividend Growth
Over the past five years, XOM has grown its dividend at a 11.2% 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%. XOM: Dividend growth is slowing — the 3-year CAGR of 4.3% trails the 5-year rate of 11.2% and the 10-year rate of 6.6%.
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. XOM's dividend safety is rated "Safe." The payout ratio of 60% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.7x. Both have similar payout ratios — MCD at 60% and XOM at 60%.
Income Comparison
A $10,000 investment in XOM generates approximately $264/year in dividend income, compared to $217/year from MCD — a difference of $47/year. At $100,000, that gap widens to $470/year.
Verdict
- Best for income: XOM
- Best for growth: XOM
- Best for safety: XOM
Frequently Asked Questions
Which has a higher dividend yield, MCD or XOM?
Exxon Mobil Corp (XOM) has a higher dividend yield of 2.64% compared to Mcdonalds Corp (MCD) at 2.17%.
Is MCD or XOM a better dividend growth stock?
Exxon Mobil Corp has the stronger dividend growth with a 5-year CAGR of 11.2%, compared to Mcdonalds Corp's 8.1%.
Which is safer for dividend income, MCD or XOM?
Mcdonalds Corp's dividend safety is rated "Moderate" while Exxon Mobil Corp 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 60% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.7x.
How much income does $10,000 in MCD vs XOM generate?
A $10,000 investment in MCD generates approximately $217/year in dividends, while the same amount in XOM generates about $264/year.
Is MCD or XOM a Dividend Aristocrat?
Mcdonalds Corp is a Dividend King (50 years) and Exxon Mobil Corp is a Dividend Aristocrat (42 years).
Which has a lower payout ratio, MCD or XOM?
Exxon Mobil Corp has a lower payout ratio of 60% compared to Mcdonalds Corp's 60%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
MCD vs XOM: which is better for retirement income?
It depends on your priorities. XOM for current income, XOM for dividend growth, XOM for safety. Many retirement investors hold both for diversification.
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