McDonald’s growth plan bolsters dividends

Article Excerpt

McDonald’s shares recently hit a new all-time high of $302, thanks to the success of its four-pronged “4D” growth strategy. That should continue to let the company keep raising your dividend, as it has each year since it became a public company in 1976. MCDONALD’S CORP. $294 is a buy. The company (New York symbol MCD; Income-Growth Dividend Payer Portfolio, Consumer sector; Shares outstanding: 725.3 million; Market cap: $213.2 billion; Dividend yield: 2.3%; Dividend Sustainability Rating: Highest; www.mcdonalds.com) is the world’s largest fast-food chain with 41,198 restaurants in over 100 countries. It serves various foods but is best known for hamburgers and french fries. Franchisees now operate 95% of the company’s outlets. Still, under that “asset light” business model, the company is responsible for buying the land and building the restaurant. It also supplies the food and pays for advertising and marketing. In exchange, franchisees pay an initial fee to McDonald’s and ongoing rental and royalty payments based on a percentage of their sales. They are also responsible…