Lots of consideration has been centered on McDonald’s seeing a change in its buyer base.
That is one thing CEO Christopher Kempczinski talked about extensively throughout the chain’s third-quarter earnings name.
“In the U.S., we continue to see a bifurcated consumer base with QSR traffic from lower-income consumers declining nearly double digits in the third quarter, a trend that’s persisted for nearly 2 years. In contrast, QSR traffic growth among higher-income consumers remained strong, increasing by nearly double digits in the quarter,” he mentioned.
To attempt to win again lower-income clients (and maintain individuals joyful usually), McDonald’s has leaned into providing extra worth.
“We continue to remain cautious about the health of the consumer in the U.S. and our top international markets and believe the pressures will continue well into 2026. Delivering industry-leading value is part of McDonald’s DNA. It’s a foundational expectation of our brand to bring consumers through our doors and keep them coming back,” he added.
Within the U.S., this has concerned selling its Further Worth Meals (EVMs) that had been launched in September with a nationwide promoting marketing campaign.
These embrace:
- $5 Sausage McMuffin with Egg meal
- $8 Huge Mac meal
- $5 Sausage Egg and Cheese McGriddles meal
- $8 10-piece Rooster McNuggets meal
Along with providing decrease costs for American shoppers, McDonald’s has invested in different areas. That has included rewarding traders.
McDonald’s additionally focuses on shareholders
Decrease menu costs haven’t come on the expense of shareholders.
“With respect to capital allocation, our priorities remain unchanged,” CFO Ian Borden mentioned throughout the name.
He laid out these priorities.
“First, we invest in opportunities to grow the business and drive strong returns. Second, we return remaining free cash flow to shareholders over time through dividends and share repurchases,” he mentioned.
Borden then famous that McDonald’s is on the verge of some very uncommon territory.
“With respect to capital returns, in October, we announced a 5% increase in our dividend, which is our 49th consecutive year of dividend increases. That’s a testament to the strength, resilience and long-term value that McDonald’s delivers and expects to continue to deliver to our shareholders. Our ability to consistently return capital while investing in the business reflects the durability of our model and the confidence we have in our future,” he added.
Extra Eating places
- Common pasta chain closing dozens of eating places
- Main restaurant chain’s $10.99 burger offers McDonald’s, Wendy’s blow
- McDonald’s is following Wendy’s by closing eating places
- Regional Mexican restaurant abruptly closes all areas
That places McDonald’s just one 12 months away from changing into a Dividend King.
“Dividend Kings are a select group of companies on Wall Street that have consistently increased their dividends for at least 50 consecutive years,” Bankrate shared.
McDonald’s has leaned into Further Worth Meals.
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Dividend Kings (50+ years of consecutive raises)
(The elite group — the longest dividend-growth streaks within the U.S.)
70+ Years
- American States Water (AWR): 71 years
- Procter & Gamble (PG): 69 years
- Parker-Hannifin (PH): 69 years
- Real Components Firm (GPC): 69 years
60–69 Years
- Dover Company (DOV): 68 years
- Northwest Pure Holding (NWN): 68 years
- Emerson Electrical (EMR): 67 years
- 3M (MMM) : 65 years
- Cincinnati Monetary (CINF): 63 years
- Coca-Cola (KO): 62 years
- Johnson & Johnson (JNJ): 62 years
- Colgate-Palmolive (CL): 61 years
- Lowe’s (LOW): 61 years
50–59 Years
- Kimberly-Clark (KMB)
- Illinois Device Works (ITW)
- Stanley Black & Decker (SWK)
- Goal (TGT)
- Sysco (SYY)
- California Water Service (CWT)
- Black Hills Corp. (BKH)
- SJW Group (SJW)
- ABM Industries (ABM)
- Tootsie Roll Industries (TR)
- Common Company (UVV)
- H.B. Fuller (FUL)
- Walmart (WMT): 50 years
- PepsiCo (PEP): 52 years
40–49 Years
- McDonald’s (MCD): 49 years
- Computerized Information Processing (ADP): 49 years
- Aflac (AFL): 41 years
Why dividends matter
Many traders favor firms that pay dividends. Zachs saluted McDonald’s a 12 months in the past when it raised its dividend for the forty eighth consecutive 12 months.
“The 6% increase brings the annual dividend payout to $7.08 per share. McDonald’s has a robust track record of rewarding its shareholders. The company has raised its dividend for 48 consecutive years since the first issued in 1976. This consistency underscores MCD’s commitment to returning capital to its shareholders while balancing investments in growth opportunities,” the analyst agency shared.
McDonald’s defined its newest dividend enhance in a press launch.
“McDonald’s has a strong history of returning capital to its shareholders and has raised its dividend for 49 consecutive years since paying its first dividend in 1976. “The brand new quarterly dividend of $1.86 per share is equal to $7.44 yearly. The corporate is dedicated to its capital allocation philosophy of investing in alternatives to develop the enterprise and drive sturdy returns, prioritizing our dividend, and repurchasing shares with remaining free money circulate,” the company shared.
Dividends, it should be noted, are a mixed bag. They reward shareholders, but they also divert cash from other priorities.
Keeping up a dividend streak for 49 years suggests that McDonald’s may have had years when its money could have been used in better places. That might be true now, as the company’s kiosk-based ordering system could clearly use more investment.
Associated: Coca-Cola quietly makes a large change to its soda manufacturers
