McDonald’s (MCD) is a legendary dividend growth stock. After being founded in 1940, the company became popular among consumers because of its food’s consistency and low prices. Today, McDonald’s is the largest restaurant chain in the world with over 37,000 locations in 100+ countries. McDonald’s success has translated to exceptional shareholder returns. The company has increased its dividend for a remarkable 40 years, hiking its payout each and every year since the company’s first dividend payment in 1976.
This exceptional track record qualifies McDonald’s to be a member of the Dividend Aristocrats, a group of elite dividend stocks with 25+ years of consecutive dividend increases. You can see the full list of all 51 Dividend Aristocrats here. Despite McDonald’s fantastic track record, there are many investors that think the restaurant’s best days are behind it. This is not the case.
In fact, McDonald’s second quarter earnings release revealed that the company is still growing at a rapid pace, with excellent comparable store sales and double-digit earnings-per-share growth. This article will analyze McDonald’s second quarter earnings release and determine whether the company is a buy at today’s price.
Quarterly Results Overview
There was a lot to like about McDonald’s second quarter earnings release. Most notably, global comparable store sales increased 6.6%. For a large, established player like McDonald’s which already has a significant restaurant base, comparable store sales are one of the most important metrics to follow because the company’s current restaurant count dwarfs its ability to grow by adding new locations.
McDonald’s comparable sales growth was driven by improved performance in each of its broad operating geographies. Here’s what the company’s CEO had to say about regional sales growth on the McDonald’s second quarter conference call:
