To accrue $5,000 annually in dividends through ownership of McDonald's stock, you'll need a substantial number of shares, contingent upon the company's dividend yield.
In the ever-evolving world of investments, McDonald's (MCD) stands out as a beacon of consistency and stability. With a rich history of dividend payments, the fast-food giant has earned a coveted spot among the Dividend Aristocrats®, having increased its annual dividend for an impressive 49 years in a row.
Over the last two decades, McDonald's dividend has demonstrated robust growth, expanding at a compound annual growth rate (CAGR) of 14%. This growth rate has more than doubled over the past 10 years, registering a CAGR of 7%. This trajectory suggests that the payout would double every five years at the current rate of growth.
For investors seeking a steady income stream, McDonald's offers an attractive proposition. To receive $5,000 in annual dividends from the company, you would need to own approximately 706 shares of McDonald's stock. The current annual dividend per share stands at about $7.08, based on the dividend yield of 2.46% and recent data from July 2025.
McDonald's business model, characterised by its franchise model, shifts significant operational risk and costs to franchise owners. This strategy has proven to be resilient, helping the company to navigate challenges and maintain a notable track record of dividend sustainability.
The company's vast and expanding real estate portfolio, often in prime locations, further bolsters its financial stability. McDonald's is more than just a dividend stock; it's an iconic brand with an incredible track record that makes it a great addition to a diversified income-focused portfolio.
While yield might attract initial attention, over the long term, dividend growth can be even more significant. McDonald's stock currently offers a forward dividend of $7.08 per share. However, it's essential to remember that while McDonald's is not expected to grow earnings every year, it looks positioned for slow, steady growth.
Investors building a dividend portfolio should bet on businesses that can stand the test of time, and McDonald's, with its resilience and consistent dividend growth, certainly fits the bill. Despite the decline in popularity of dividends during the 1980s and 1990s, McDonald's has maintained its dividend-paying tradition, making it a reliable choice for income-focused investors.
- Engaging in McDonald's (MCD) as an investment opportunity could be advantageous for those interested in personal-finance, given its consistent dividend growth and resilient business model.
- The growth in McDonald's dividend over the last two decades, with a compound annual growth rate (CAGR) of 14%, indicates potential for investors seeking financial gains through investing.
- Incorporating McDonald's stock within a diversified business or personal-finance portfolio could offer a steady stream of income, as evident from the company's status as a Dividend Aristocrat® and its impressive record of maintaining and increasing annual dividends for 49 consecutive years.
