SHW vs TGT: Dividend Comparison

At $368.50 per share, $10,000 buys about 27.1 shares of Sherwin Williams Co (SHW). Each share pays $3.16 per year in dividends, so the position starts out generating roughly $86 per year — about $7 a month.

At $115.49 per share, $10,000 buys about 86.6 shares of Target Corp (TGT). Each share pays $4.50 per year in dividends, so the position starts out generating roughly $390 per year — about $32 a month.

TGT is the larger income stream from day one: $304 per year more on the same $10,000 invested.

Sherwin Williams Co (SHW) has raised its dividend about 9.5% a year over the past five years. If that pace held, the $87 per year that $10,000 generates today at the current 0.87% yield would reach $214 per year by 2036 — a 2.1% yield on the original cost.

Target Corp (TGT) has raised its dividend about 9.4% a year over the past five years. If that pace held, the $401 per year that $10,000 generates today at the current 4.01% yield would reach $982 per year by 2036 — a 9.8% yield on the original cost.

On those trailing rates, TGT pays more in 2036: $982 versus $214 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.

It doesn't, on the trailing numbers. Target Corp (TGT) yields more today (4.01% vs 0.87%) and has also grown its dividend at least as fast (9.4% vs 9.5% a year over five years). Unless SHW accelerates its raises or TGT stumbles, SHW never closes the income gap — TGT wins on both current income and growth.

Sherwin Williams Co (SHW) earns $10.28 per share against $3.16 paid out in dividends — 3.3x coverage (a 31% payout ratio).

Target Corp (TGT) earns $8.25 per share against $4.50 paid out in dividends — 1.8x coverage (a 55% payout ratio).

SHW'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 TGT if earnings weaken.

For income you need right now, Target Corp (TGT) leads: $100,000 invested today pays about $335 a month at the current 4.01% yield, versus $72 a month from Sherwin Williams Co (SHW) at 0.87%.

On consistency: SHW has raised its dividend 40 consecutive years; TGT has raised its dividend 42 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.