McDonald’s (NYSE:MCD) stock has climbed 21.7% in 2019 as of close on September 26. The company has achieved strong results so far in 2019 as it has reported strong comparable sales across its major segments.
Investors can expect to see its third quarter earnings report in October. Of more interest to us today is McDonald’s status as a dividend aristocrat.
A dividend aristocrat is a stock that has achieved at least 25 consecutive years of dividend growth. McDonald’s has raised its dividend in every year since its first dividend payout in 1976.
This means that McDonald’s is well on its way to becoming a dividend king – a stock with at least 50 consecutive years of dividend growth – by the latter part of the next decade.
The stock currently offers a quarterly dividend of $1.25 per share. This represents a 2.3% yield. The payout is not anything to get excited about, but it adds a nice boon for a stock that has posted impressive capital growth over the long haul.
McDonald’s stock has achieved average annual returns of 15.9% over the past 15 years as of its most recent close. This terrific and steady return is bolstered by its payout.
McDonald’s has shown a commitment to its shareholders. In the second quarter the company returned $2 billion through share repurchases and dividends. It hiked its quarterly payout by 8% in September to $1.25 per share. The only drawback is McDonald’s valuation, which is pricey in late September.
Shares possess a high P/E Ratio of 27, so value investors may want to wait for a more favourable entry point.
