McDonald’s global presence and proven ability to adapt to market challenges through strategic pricing and menu innovations demonstrate exceptional resilience. Its consistent dividend growth reflects fundamental strength, while successful value initiatives in key markets are driving improved performance.
This creates a compelling investment case for long-term investors seeking both growth and income stability. That’s why this firm remains our #1 Conservative Buy while the stock trades at 23.4 times the forward earnings forecast.
MCDONALD’S CORP. (New York symbol MCD) is the world’s largest fast-food chain with over 42,000 restaurants in 119 countries. It serves a wide variety of food but is best known for its hamburgers and French fries.
The company reported higher-than-expected results for its latest quarter, despite lower sales at its international locations, particularly in China and the Middle East. However, sales in the U.S. improved thanks to a successful $5 value meal promotion.
In the three months ended September 30, 2024, McDonald’s revenue rose 2.7%, to $6.87 billion from $6.69 billion a year earlier. That beat the consensus forecast of $6.82 billion.
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Overall same-store sales fell 1.5% on declines at the International Operated Markets division (Australia, Canada, France, Germany, Italy, the Netherlands, Spain and the U.K.), down 2.1%; and the International Developmental Licensed Markets division (mainly outlets in China, Japan, the Middle East and remaining markets), down 3.5%. However, U.S. same-store sales rose 0.3%.
McDonald’s earnings before unusual items fell 0.6%, to $2.23 billion from $2.34 billion. Due to fewer shares outstanding, per-share earnings gained 1.3%, to $3.23 from $3.19. That also beat the $3.20 consensus estimate.
Blue Chip Stocks: McDonald’s handled a recent crisis well
Meanwhile, the company has now resumed selling its Quarter Pounder hamburger in certain U.S. states following a recent outbreak of E. coli linked to a supplier of onions. That should help restore consumer confidence, although the outbreak will almost certainly hurt traffic at its U.S. stores in the fourth quarter of 2024.
For all of 2025, McDonald’s will probably earn $12.60 a share, and the stock trades at a reasonable 23.5 times that estimate.
McDonald’s has raised its annual dividend rate each year since 1976. The next increase will come in December 2024 when your quarterly payment increases 6.0%, to $1.77 a share from $1.67. This marks 48 consecutive years of growth since 1976 and the new annual rate of $7.08 yields 2.4%.
Including this latest increase, that payment has grown an average 7.2% annually over the past 5 years. McDonald’s TSI Dividend Sustainability Rating is Highest.
Recommendation in Wall Street Stock Forecaster: McDonald’s Corp. is a buy.
