S&P/ASX 200 Index (ASX: XJO) supermarket shares Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) both upped their dividends in financial year 2022.
But could the smaller of the two actually offer better value to shareholders? Readers might be surprised by the answer.
Let's take a closer look at how the pair's payouts stack up.
Do Coles shares offer better dividends than Woolies?
Those looking to invest in ASX 200 supermarket shares likely end up choosing between Coles and Woolworths.
While the pair are similar in many ways, they differ in many more. And their dividends represent one measure in which they are markedly different.
Coles declared a 30-cent final dividend for financial year 2022, bringing its full-year payout to 63 cents per share – a 3.3% year-on-year increase.
Meanwhile, Woolies upped its final offering to 52 cents per share, bolstering its full-year dividends to 92 cents.
But bigger dividends don't necessarily mean better value.
Considering the current Coles share price – $17.24 – the $23 billion supermarket is trading with a 3.65% dividend yield.
At the same time, shares in $43.5 billion supermarket goliath Woolworths, currently swapping hands for $35.89 apiece, boast a yield of just 2.56%.
That means Coles shares offer a better dividend-to-share price ratio for investors.
It's also worth noting that both companies offer fully franked dividends. Therefore, their payouts might bring additional benefits to some shareholders at tax time.
Additionally, both offer a dividend reinvestment plan (DRP), allowing shareholders to receive their dividends in the form of stock rather than cash.
The Coles share price has also been outperforming that of Woolworths lately.
The smaller supermarket giant's stock has slipped 3.7% year to date and 0.2% over the last 12 months. Meanwhile, Woolworths has dumped 6.7% in 2022 so far and 9.5% since this time last year.
For context, the ASX 200 has fallen 7.7% year to date and 9.7% over the last 12 months.
