Two dependable dividend payers are starting to look more attractive just as bond yields are pressuring the entire market. Medtronic and McCormick both offer yields well above the market average, and both appear to be entering or accelerating a business improvement phase that could reward patient investors over the next several years.
Medtronic and McCormick Look More Attractive
That matters now because the U.S. 10-year Treasury yield has surged to its highest level since 2007, making income stocks compete directly with bonds for investor attention. When government debt suddenly pays more, any company offering a durable dividend has to prove its cash flows, pricing power and balance-sheet discipline. Medtronic and McCormick are doing exactly that.
Sentiment Indicators
Medtronic is the cleaner story. The medical device giant has raised its dividend for 49 straight years, putting it one step away from Dividend King status, and its yield around 3.3% sits near the high end of its own history. More important than the payout, though, is the operating turnaround. The company spent years fixing a bloated business structure, and that overhaul now appears to be bearing fruit. Revenue growth reached nearly 14% in the first quarter of fiscal 2027 after the company posted its fastest annual growth in a decade in fiscal 2026.
For investors, that combination is hard to ignore. A higher yield is useful only if the dividend is backed by a business with staying power, and Medtronic’s scale, global franchise and medical-device exposure give it that. If the market is still pricing it like a sluggish legacy healthcare name, long-term buyers may be getting the chance to own a steadier compounder before the turnaround is fully recognized.
McCormick is a little more complicated, but potentially more rewarding. The spices and flavorings company has increased its dividend for 39 consecutive years, and its yield above 4% is near a recent high. That alone makes it interesting in a market where investors can finally earn more from bonds. Yet McCormick’s bigger appeal is strategic: it is preparing to buy Unilever’s food business, a deal that would roughly double sales and widen its emerging-market exposure from 25% to more than 40%.
That matters because scale in consumer staples can be a powerful margin driver. McCormick expects cost cuts and cross-selling opportunities from the deal, and those benefits could help offset a tougher consumer environment marked by inflation and cautious spending. Even before any acquisition closes, organic sales growth of 1.9% in the second quarter suggests the business is holding up better than many investors may think.
The main risk with McCormick is execution. If the deal stalls or integration proves messier than expected, the stock could stay cheap for a while longer. But for dividend investors, that may be a feature rather than a bug. You are being paid to wait, and the company’s long history of annual dividend increases suggests management understands the value of consistency.
The larger narrative here is simple: in a world where bond yields are suddenly more attractive, investors do not need to chase the highest yield available. They need durable yield, backed by businesses that can grow through a full cycle. Medtronic looks like the less risky choice, while McCormick offers more upside if its acquisition plan works. Either way, both deserve a spot on the watchlist for investors who think in years, not weeks.
| Entity | Gains | Losses |
|---|---|---|
| Medtronic shareholders | ▲Turnaround gains traction | ▼Slow-growth skeptics |
| McCormick shareholders | ▲Bigger scale, higher yield | ▼Deal uncertainty |
| Bond investors | ▲Higher near-term income | ▼Less relative appeal |
| Long-term dividend investors | ▲Durable compounding | ▼Short-term traders |
