One of These 3 Companies Is One Year From Becoming a Dividend King. Here Is Which One

Dividend Kings are the rarest breed in income investing: US companies with at least 50 consecutive years of dividend increases. Of the three long-tenured Aristocrats profiled here, only one is genuinely on the doorstep. McDonald’s (NYSE:MCD | MCD Price Prediction) enters 2026 with 49 consecutive annual dividend increases through 2025, putting it exactly one hike away from Kinghood. Sherwin-Williams (NYSE:SHW) and Air Products & Chemicals (NYSE:APD) are decorated Aristocrats in their own right, but neither is one year away. Here is the safety read on all three, starting with the imminent addition.

McDonald’s: The One That Is One Raise Away

McDonald’s carries a current dividend yield of 2.91% on a quarterly payout of $1.86 per share, which annualizes to $7.44. The last increase moved the quarterly rate from $1.77 in 2025 to $1.86 in 2026, extending a streak of 49 consecutive annual increases through 2025. The next declared raise, widely expected around the traditional fall board meeting cadence, would make McDonald’s a Dividend King.

Safety looks solid. The company earns a 31.9% net margin and a 46.1% operating margin, with interest coverage of 7.83x and a free cash flow yield of 4.09% that comfortably tops the current dividend yield. Q2 2026 adjusted EPS came in at $3.38, beating the $3.32 estimate, on revenue of $7.10 billion. Management guided full-year operating margin to the mid-to-high 40% range with free cash flow conversion in the low-to-mid 80s, and Q2 buybacks alone hit $858 million. The franchise model is the machine behind the streak: royalty and rent flows from 46,028 systemwide restaurants generate predictable cash that easily funds the payout.

The bull case for income investors is straightforward. A globally diversified, asset-light royalty stream with a loyalty base of ~220 million 90-day active users and a runway to 50,000 restaurants globally in 2028 is exactly the kind of business that funds five decades of raises. CFO Ian Borden told analysts on the Q2 call, “We continue to be highly disciplined allocators of capital towards new restaurants based on our ability to generate attractive returns.”

Risk to note: US traffic is under pressure. Q2 US comparable sales grew just 0.8%, and Borden said US comps were slightly negative in July. The stock has felt it, with the shares hitting two-year lows this week. Weak traffic does not threaten the dividend given the coverage cushion, but it caps near-term dividend-growth acceleration.

Sherwin-Williams: An Aristocrat, but Not One Year Away

Sherwin-Williams pays a quarterly dividend of $0.80, with an annualized forward rate of $3.20 and a current dividend yield of roughly 0.98%. The 2026 quarterly rate stepped up from $0.79 in 2025 to $0.80. Sherwin is a well-established Aristocrat, but the verified dividend record here does not support a 50-year claim, so this name is several years short of Kinghood, not one.

Coverage looks robust. Q2 2026 delivered adjusted EPS of $3.70, beating $3.52, on revenue of $6.79 billion, up 7.5% year over year. Free cash flow jumped to $1.24 billion in the quarter with 86% FCF conversion, and the company returned $1.46 billion to shareholders via dividends and buybacks in Q2. Full-year adjusted EPS guidance was raised to $11.80 to $12.20, against trailing diluted EPS of $10.80. Return on equity sits at 65.1%, a remarkable figure for a paint and coatings business.

The bull case for income rests on dividend growth rather than headline yield. Sherwin runs a differentiated company-owned Paint Stores distribution network, took an 8% price increase in Paint Stores Group effective September 1, and has the pricing discipline to compound the payout over long stretches. For investors reinvesting, the payout ratio remains modest relative to earnings power.

Risk to note: management flagged that leading indicators point to continued demand softness in H2 2026, with broad-based cost inflation and higher interest expense from the Suvinil acquisition financing. Shareholders equity fell 12.4% year over year, a reminder that heavy buybacks and M&A are compressing book value even as cash returns grow.

Air Products & Chemicals: Long Streak, but Not Near 50

Air Products pays a quarterly dividend of $1.81, with an annualized forward rate of $7.24 and a current dividend yield of 2.51%. The 2026 quarterly amount stepped up from $1.79 in 2025 to $1.81. Air Products is a long-standing Aristocrat, but the verified record here does not place it within a year of the 50-year mark.

The safety read requires nuance. Adjusted fiscal Q3 2026 EPS came in at $3.47, beating $3.34 and up 12% year over year, on revenue of $3.16 billion, with adjusted operating margin expanding 110 basis points to 25.6%. Management raised FY26 adjusted EPS guidance to $13.39 to $13.49. On a GAAP basis the quarter reflected a loss per share of $6.47 driven by $2.90 billion in pre-tax project exit charges tied to the Louisiana Clean Energy Complex exit and related wind-downs, which pushed trailing diluted EPS to negative $0.20. Cash and equivalents also fell to $980.5 million, down 57.8% year over year. Adjusted earnings fund the payout, and on that basis coverage remains intact.

The bull case for income is oligopoly economics. Industrial gases run on long-dated take-or-pay contracts, and Air Products just won a long-term contract to supply high-purity industrial gases for a major U.S. semiconductor expansion. Add a Samsung semiconductor gas supply deal in South Korea and Asia segment operating income up 18%, and the cash-generation base underpinning the dividend is durable.

Risk to note: the clean-energy portfolio cleanup was expensive, cash on hand has dropped materially, and shares underperformed competitors in Wednesday’s trading. Investors are pricing in execution risk on the reset.

Bottom Line

All three companies are Aristocrats whose business models, franchised restaurants, company-owned paint distribution, and take-or-pay industrial gas contracts, are the reason each has funded decades of raises. Only McDonald’s is verifiably one increase away from Dividend King status, sitting at 49 consecutive annual increases through 2025. Sherwin-Williams and Air Products are still compounding, but the crown belongs to the burger chain next. (If you want a broader look at the club McDonald’s is about to join, we ranked ten Kings by valuation in a free report here: 10 Dividend Kings to Buy Now and Hold Forever.)

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