What McDonald's Latest Dividend Hike Means for Investors
McDonald's announced its 48th straight dividend increase. Here's why dividend growth is so important.


McDonald's (MCD) gave income investors something to cheer about Thursday when the fast food giant announced another dividend hike, extending its long streak of annual increases.
The company's latest 6% raise brings McDonald's quarterly dividend to $1.77 per share, or $7.08 per share on an annual basis. This works out to be less than 60% of analysts' expected earnings of $11.82 for McDonald's full fiscal year, suggesting this payout is secure. The next dividend is payable on December 16 to shareholders of record at the close of business on December 2.
Incredibly, this latest increase marks the 48th consecutive year in which McDonald's has raised its annual dividend payment.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Why McDonald's dividend hikes matter
Businesses with dependable dividend growth are important for several reasons. For one, "companies that raise their payouts like clockwork decade after decade can produce superior total returns (price change plus dividends) over the long run, even if they sport apparently ho-hum yields to begin with," writes Dan Burrows, senior investing writer at Kiplinger, in his feature on the best dividend stocks for dependable dividend growth.
Indeed, MCD stock is up 12.6% on a price return basis over the past 12 months, but 14.1% higher when you add in the dividend. Over the past five years, McDonald's is up 58.8% on a total return basis vs 42.8% just based on price.
Additionally, dividend growers offer some peace of mind to investors. "After all, any company that manages to raise its dividend year after year – through recession, war, market crashes and more – is demonstrating both its financial resilience and its commitment to returning cash to shareholders," Burrows adds.
McDonald's decades-long streak of consistent dividend growth makes it a member of the Dividend Aristocrats, the best dividend stocks in the S&P 500 that have consistently raised their annual payouts for 25 straight years.
And if it makes it to 50 consecutive years of dividend hikes, McDonald's will join the elite group of Dividend Kings.
Is MCD stock a buy, sell or hold?
Analysts are upbeat toward the Dow Jones stock. According to S&P Global Market Intelligence, the consensus recommendation among the 37 analysts it tracks that are following MCD is a Buy.
However, analysts' price targets have struggled to keep up with McDonald's recent rally. Currently, the average analyst price target of $302.44 represents implied upside of less than 1% to current levels.
Financial services firm Jefferies is one of the more bullish outfits on MCD stock with a Buy rating and $330 price target.
"Management has focused on the 3 'Ds': digital, delivery, and drive-thru, and a '4th D' now in focus, i.e., an acceleration in new unit growth," said Jefferies analyst Andy Barish in a September 9 note. He added that his firm expects an operating margin in the mid-to-high 40% range and they see further acceleration in chicken sandwich momentum and rewards as potential drivers of near-term same-store sales growth.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
What Wall Street's CEOs Are Saying About Trump's Tariffs
We're in the thick of earnings season and corporate America has plenty to say about the Trump administration's trade policy.
By Karee Venema
-
The Role of the U.S. Dollar in Retirement: Is It Secure?
Protect your retirement from de-dollarization, because “capital always goes where it is treated best."
By Adam Shell
-
What Wall Street's CEOs Are Saying About Trump's Tariffs
We're in the thick of earnings season and corporate America has plenty to say about the Trump administration's trade policy.
By Karee Venema
-
To Stay on Track for Retirement, Consider Doing This
Writing down your retirement and income plan in an investment policy statement can help you resist letting a bear market upend your retirement.
By Matt Green, Investment Adviser Representative
-
How to Make Changing Interest Rates Work for Your Retirement
Higher (or lower) rates can be painful in some ways and helpful in others. The key is being prepared to take advantage of the situation.
By Phil Cooper
-
When to Sell Your Stock
Knowing when to sell a stock is a major decision investors must make. While there's no one correct answer, we look at some best practices here.
By Charles Lewis Sizemore, CFA
-
Within Five Years of Retirement? Five Things to Do Now
If you're retiring in the next five years, your to-do list should contain some financial planning and, according to current retirees, a few life goals, too.
By Evan T. Beach, CFP®, AWMA®
-
The Home Stretch: Seven Essential Steps for Pre-Retirees
The decade before retirement is the home stretch in the race to quit work — but there are crucial financial decisions to make before you reach the finish line.
By Mike Dullaghan, AIF®
-
Stock Market Today: Great Power Affairs Mesmerize Markets
The U.S. and China are at least talking about talking about tariffs, and investors, traders and speculators are showing a little less fear.
By David Dittman
-
Three Options for Retirees With Concentrated Stock Positions
If a significant chunk of your portfolio is tied up in a single stock, you'll need to make sure it won't disrupt your retirement and legacy goals. Here's how.
By Evan T. Beach, CFP®, AWMA®