McCormick & Company (MKC): A Tier Two Dividend Growth Stock

Some companies make food.

McCormick makes food better.

That's been its business for well over a century.

Founded in 1889, McCormick & Company has grown into the global leader in spices, seasonings, herbs, sauces, condiments, and flavor solutions. From iconic retail brands like McCormick, French's, Frank's RedHot, Cholula, and Old Bay to custom flavor solutions for restaurants and food manufacturers, the company touches millions of meals every single day.

People may not think much about spices.

The food industry certainly does.

Key Statistics

• Ticker: MKC
• Tier: Tier Two
• Industry: Consumer Staples
• Market Capitalization: Approximately $15 billion+
• Consecutive Years of Dividend Increases: 40+ years
• Dividend Aristocrat Status: Yes
• Dividend King Status: No

McCormick has increased its dividend for more than four decades, earning Dividend Aristocrat status. Through inflation, recessions, changing consumer tastes, and shifting grocery trends, the company has continued rewarding shareholders with steadily growing dividends.

Why MKC Fits Tier Two

Tier Two is designed for investors who have moved beyond the earliest stages of wealth accumulation but still have many years before retirement.

The objective is to balance continued compounding with meaningful dividend income.

Across my Tier Two portfolio, I'm generally looking for:

• A dividend yield between approximately 2% and 4%
• Annual dividend growth around 7% to 8%

McCormick has consistently demonstrated both.

It continues investing for future growth while returning an increasing amount of cash to shareholders through its dividend.

That's exactly what I want from a Tier Two company.

Flavor Is the Business

One of the reasons I admire McCormick is that it occupies a unique position within the food industry.

The company doesn't compete with the food manufacturers that use its products.

It helps them succeed.

Whether it's seasoning, sauces, marinades, recipe mixes, or custom flavor solutions, McCormick has become an indispensable partner for grocery brands, restaurants, and food service companies around the world.

Flavor isn't a fad.

Consumers always want food that tastes better.

McCormick has spent more than a century becoming one of the world's foremost experts at delivering exactly that.

That's a competitive advantage that's incredibly difficult to replicate.

Why It Belongs in Tier Two Instead of Tier One

McCormick represents a business that has reached an ideal stage of maturity.

It's still growing.

It's still innovating.

It's still expanding around the world.

But management has also reached the point where rewarding shareholders with a meaningful and growing dividend has become a central part of its capital allocation strategy.

That's what separates Tier Two from Tier One.

Tier One companies are primarily focused on maximizing long-term compounding.

Tier Two companies continue compounding while sharing more of their success with shareholders through a larger dividend.

McCormick fits that description perfectly.

Looking Beyond the Headlines

One of the biggest stories surrounding McCormick in 2026 has been its announced combination with Unilever's Foods business. If completed, the transaction would significantly expand McCormick's portfolio with globally recognized brands while creating one of the world's premier flavor-focused food companies. It's an ambitious deal that also introduces integration risk and has led to increased market scrutiny in the short term.

Large acquisitions often create uncertainty.

Execution matters.

Debt matters.

Integration matters.

As long-term investors, those are all things we should monitor.

At the same time, transformational acquisitions can strengthen exceptional businesses for decades to come.

Rather than reacting to short-term market volatility, I'll be watching to see whether management successfully integrates the business while maintaining the disciplined capital allocation that has defined McCormick for generations.

A Business Built to Last

One thing I appreciate about McCormick is how timeless its products are.

People may change what they eat.

They rarely stop caring how it tastes.

Whether consumers are cooking at home, dining in restaurants, or buying prepared foods, flavor remains one of the most important parts of the experience.

That gives me confidence that McCormick's products — and its expertise — will remain in demand for decades to come.

Final Thoughts from the DGI Crab

McCormick may not be the fastest-growing company in my portfolio.

It doesn't need to be.

Its strength comes from owning some of the world's most recognizable flavor brands while helping food companies improve products enjoyed by millions of people every day.

For a Tier Two DGI Crabber, McCormick offers exactly what I'm looking for.

Growing income. Continued long-term compounding. Exceptional brands. A durable competitive advantage. And a management team focused on creating value over decades — not quarters.

That's exactly the kind of business I want helping bridge the gap between aggressive growth and retirement income.