McDonald's (NYSE:MCD) is a top dividend stock and it recently reminded investors why it’s a fantastic long-term investment. The fast-food giant, known for its iconic Big Mac and golden arches, announced a 10% hike in its quarterly cash dividend earlier this month. This maneuver is not just a reflection of McDonald's robust financial health, but also a testament to its growth strategy dubbed, "Accelerating the Arches." This strategy underscores a long-term vision for profitable growth.
The company’s strong and consistent growth over the years is one of the key reasons McDonald’s is a top dividend growth stock to own; it has raised its dividend for 47 straight years. The new quarterly dividend of $1.67 means investors will be collecting $6.68 in dividends per year for each share that they own. The stock now yields around 2.7%. At that rate, to earn $1,000 in annual dividends, investors would you need to buy close to $37,000 worth of McDonald’s stock.
McDonald’s has been doing well amid inflation as its pricing power has allowed it to raise prices and still generate good growth. But investors appear to be concerned about how sustainable that strategy can be as year to date, shares of McDonald’s are down 5%.
At 23 times earnings, it’s not a terribly expensive stock to own as this is still a top brand with a dominant, global presence. McDonald’s is still in good shape and can make for a solid long-term buy. The company releases its latest earnings numbers later this month.
