McDonald’s (NYSE:MCD) has an impressive track record of increasing dividends for the past 47 years, which helped it earn a spot among the Dividend Aristocrats. A Dividend Aristocrat is known for raising its dividends for at least 25 consecutive years, which reflects its financial stability and commitment to enhancing shareholders’ value. Thus, steady dividend growth makes MCD a worthy income stock to consider.
Furthermore, MCD offers a dividend yield of 2.3%, surpassing the consumer cyclical sector’s average of 1%. Also, Wall Street analysts anticipate the stock’s price to increase by over 16% in the next 12 months.
Here’s What Makes MCD Stock Worth Considering
McDonald’s boasts robust worldwide brand recognition, establishing itself as a household name associated with fast food. This results in steady customer traffic and revenue streams. Further, the company remains focused on enhancing operational efficiency and managing costs across its restaurants.
Additionally, MCD’s commitment to innovation, efforts to update its menu, and focus on technological integration through mobile ordering and self-service kiosks augur well for growth. It is worth mentioning that MCD recently entered into a deal with Krispy Kreme (DNUT). Under the agreement, MCD has agreed to a national rollout of Krispy Kreme donuts across all McDonald’s locations in the United States by the end of 2026. MCD expects the move to bolster its breakfast category.
Investors should note that hedge funds are also optimistic about MCD, as they bought 264,000 shares of McDonald’s stock in the last quarter. Overall, the stock has a Very Positive Hedge Fund Confidence Signal at present.
Is McDonald’s a Buy, Sell, or Hold Stock?
Wall Street analysts remain cautiously optimistic about MCD stock. It has received 17 Buy and eight Hold recommendations for a Moderate Buy consensus rating. The analysts’ average price target of $323.58 implies 16.14% upside potential from current levels. Shares of the company have gained about 7% over the past six months.
Concluding Thoughts
Overall, income investors could consider MCD stock. Its dividend payout appears sustainable due to its strong financial position. Also, efforts to improve its performance through cost-cutting measures and strategic deals are encouraging.
