SHW vs TGT: Dividend Yield, Growth & Safety Comparison
Sherwin Williams Co (SHW) from Materials and Target Corp (TGT) from Consumer Staples offer different dividend profiles for income-focused portfolios. TGT offers a significantly higher 4.01% yield compared to SHW's 0.87%, a gap of 3.15%. Both stocks show similar dividend growth rates, each around 9.5% over the past five years. Both stocks carry a "Safe" dividend safety rating. Both are classified as Dividend Aristocrats.
Key Metrics Comparison
| Metric | SHW | TGT |
|---|
| Dividend Yield | 0.87% | 4.01% |
| Annual Dividend | $3.16 | $4.50 |
| 5-Year CAGR | 9.5% | 9.4% |
| Payout Ratio | 31% | 55% |
| Consecutive Years | 40 | 42 |
| Price | $368.50 | $115.49 |
Yield Comparison
Target Corp (TGT) currently yields 4.01%, which is attractive for the broader market. That's 3.15% more than Sherwin Williams Co (SHW), which yields 0.87%. In dollar terms, TGT pays $4.50/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 TGT's 9.4%. 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%. TGT: Dividend growth is slowing — the 3-year CAGR of 1.8% trails the 5-year rate of 9.4% and the 10-year rate of 11.1%.
Dividend Safety
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. TGT's dividend safety is rated "Safe." The payout ratio of 55% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.8x. SHW's payout ratio of 31% is more conservative than TGT's 55%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in TGT generates approximately $401/year in dividend income, compared to $87/year from SHW — a difference of $314/year. At $100,000, that gap widens to $3140/year.
Verdict
- Best for income: TGT
- Best for safety: SHW
Frequently Asked Questions
Which has a higher dividend yield, SHW or TGT?
Target Corp (TGT) has a higher dividend yield of 4.01% compared to Sherwin Williams Co (SHW) at 0.87%.
Is SHW or TGT a better dividend growth stock?
Sherwin Williams Co has the stronger dividend growth with a 5-year CAGR of 9.5%, compared to Target Corp's 9.4%.
Which is safer for dividend income, SHW or TGT?
Sherwin Williams Co's dividend safety is rated "Safe" while Target Corp is rated "Safe." The payout ratio of 31% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.3x. The payout ratio of 55% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.8x.
How much income does $10,000 in SHW vs TGT generate?
A $10,000 investment in SHW generates approximately $87/year in dividends, while the same amount in TGT generates about $401/year.
Is SHW or TGT a Dividend Aristocrat?
Sherwin Williams Co is a Dividend Aristocrat (40 years) and Target Corp is a Dividend Aristocrat (42 years).
Which has a lower payout ratio, SHW or TGT?
Sherwin Williams Co has a lower payout ratio of 31% compared to Target Corp's 55%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
SHW vs TGT: which is better for retirement income?
It depends on your priorities. TGT for current income, SHW for safety. Many retirement investors hold both for diversification.
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