McDonald's (MCD) Rewards Investors With a 10% Dividend Hike
McDonald's Corporation MCD announced a 10% increase in its quarterly cash dividend, in a strategic move to reaffirm its commitment to shareholders. The company declared a dividend of $1.67 per share of common stock, payable on Dec 15, 2023, to shareholders of record as of Dec 1, 2023.
This 10% hike reflects McDonald's confidence in its Accelerating the Arches growth strategy, emphasizing long-term profitability for all stakeholders. With a rich history of returning capital, MCD has consecutively lifted its dividend for an impressive 47 years since initiating payouts in 1976.
Following the hike, the company’s new annualized dividend amounted to $6.68 per share, giving a yield of 2.6%. In 2022, it raised its dividend by 10%. MCD’s payout ratio is 55, with a five-year dividend growth rate of 6.4%.
McDonald's remains steadfast in its capital allocation philosophy, prioritizing reinvestment in the business to fuel sustainable growth. It is committed to returning all free cash flow to shareholders over time, achieved through a balanced combination of dividends and share repurchases.
We appreciate McDonald's consistent efforts to enhance shareholders’ returns, despite high inflation affecting most industries. These initiatives reflect the company’s business strength and sustainability of its cash flows.
In the past year, this Zacks Rank #3 (Hold) stock has gained 9% compared with the industry’s 5.2% growth.
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Expansion Strategy Driving Growth
Unwavering in its growth strategy, the company remains highly assured of its ability to foster sustained, long-term profitable growth for shareholders. As the globe's largest fast-food restaurant chain spanning over 100 countries, McDonald's has attained billion-dollar brand status through consistent product innovations and global expansions.
Despite unfavorable scenario, the company continues to expand its global footprint. It is planning to open more than 1,900 restaurants globally in 2023, including 400 openings in the United States and IOM segment and 1,500(including nearly 900 in China) inaugurations in the IDL market. It expects net restaurant unit expansion to contribute nearly 1.5% to 2023 systemwide sales growth in constant currencies.
Zacks Rank & Key Picks
MCD currently carries a Zacks Rank #3 (Hold).
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