Costco (NASDAQ:COST) has one of the more attractive business models in the retail industry. Its subscription setup powers unbeatably low prices that keep customer traffic flowing. And because most of its profits come from annual fees rather than sales markups, the warehouse giant's earnings aren't as sensitive to ups and downs in the economy.

As a dividend stock, though, Costco has a few major drawbacks. That's why income investors might want to take a look at Home Depot (NYSE:HD), McDonald's (NYSE:MCD), or Johnson & Johnson (NYSE:JNJ) instead.

Generous payout: Home Depot

Like Costco, Home Depot has a habit of posting growth levels that its peers just can't match. Its comparable-store sales trounced rival Lowe's in 2016, and the market leader's momentum carried into the current fiscal year as comps jumped 6% in the first quarter compared to Lowe's 2% rise.

A man testing out a power drill.

Image source: Getty Images.

Home Depot is much more generous with its capital return promises than Costco, though. It targets returning 55% of annual earnings to investors in the form of dividends, on top of an aggressive stock repurchase program. Costco's payout ratio is closer to 30%, and Lowe's aims to return just 35% of earnings to investors as dividends. Shareholders don't have to give up top-line growth for that meatier payout, either. Home Depot may not be adding aggressively to its store base as both Costco and Lowe's are doing. But the retailer is still on pace to crack $100 billion in annual sales within the next year.

Higher yield: McDonald's

Costco's 1.3% dividend yield is far below what you could get by buying a broadly diversified index fund. Investors who want to do better than that should consider McDonald's (NYSE:MCD) , which is currently yielding a tasty 2.4%. Yes, the fast-food titan has endured years of slipping customer traffic as diners increasingly opt for healthier, higher quality fare. But a solid growth rebound over the past few quarters shows that Mickey D's has a few levers -- beyond just all-day breakfast -- that it can pull to spark sales gains.

COST Dividend Yield (TTM) Chart

COST Dividend Yield (TTM) data by YCharts

And even if sales stay stubbornly low, McDonald's stands to become more profitable over the next few years. The company generates the majority of its earnings from the rent, royalties, and fees it charges the franchisees that run 85% of its restaurants today. McDonald's is doubling down on that efficient model with a plan to push the percentage of franchised locations up to 95%.

Predictable income: Johnson & Johnson

In my view, the biggest drawback to owning Costco as an income investment is its volatile payout history. Since management prefers to use special dividends to return most of the retailer's excess capital, shareholders can't be sure when the next monster check might hit their portfolios.

With Johnson & Johnson, investors have a lot more clarity about the dividend growth they'll be getting. The healthcare titan has hiked its payout in each of the last 55 years, after all. Its latest 5% increase was powered by solid fiscal 2016 operating results; organic sales rose by 7%, and adjusted profits jumped 9%.

There are many reasons why Johnson & Johnson has been such a great long-term stock investment. These include a diverse operating structure that spans over 230 subsidiaries touching all areas of the healthcare industry. The company is also organized around innovation, which makes it hard for rivals to do lasting damage to it. The $9 billion it spends each year on research and development ensures that its pipeline stays packed with products that keep sales, profits -- and dividends -- steadily marching higher.

Demitrios Kalogeropoulos owns shares of Costco Wholesale, Home Depot, and McDonald's. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool recommends Home Depot and Lowe's. The Motley Fool has a disclosure policy.