Analyzing NYSE:MCD's Dividend Potential.

Last update: Sep 5, 2024

MCDONALD'S CORP (NYSE:MCD) was identified as a stock worth exploring by dividend investors by our stock screener. NYSE:MCD scores well on profitability, solvency and liquidity. At the same time it seems to pay a decent dividend. We'll explore this a bit deeper below.

How We Gauge Dividend for NYSE:MCD

ChartMill assigns a proprietary Dividend Rating to each stock. The score is computed by evaluating various valuation aspects, like the yield, the history, the dividend growth and sustainability. NYSE:MCD was assigned a score of 7 for dividend:

Compared to an average industry Dividend Yield of 3.16, MCD pays a better dividend. On top of this MCD pays more dividend than 81.48% of the companies listed in the same industry.
The dividend of MCD is nicely growing with an annual growth rate of 8.37%!
MCD has paid a dividend for at least 10 years, which is a reliable track record.
MCD has not decreased their dividend for at least 10 years, which is a reliable track record.

Health Assessment of NYSE:MCD

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:MCD, the assigned 5 reflects its health status:

MCD has an Altman-Z score of 5.02. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
MCD has a Altman-Z score of 5.02. This is amongst the best in the industry. MCD outperforms 91.11% of its industry peers.
MCD has a better Debt to FCF ratio (5.43) than 74.81% of its industry peers.

Analyzing Profitability Metrics

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:MCD has earned a 9 out of 10:

MCD has a better Return On Assets (15.44%) than 92.59% of its industry peers.
MCD has a Return On Invested Capital of 18.79%. This is amongst the best in the industry. MCD outperforms 91.11% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MCD is significantly above the industry average of 10.11%.
The last Return On Invested Capital (18.79%) for MCD is above the 3 year average (17.45%), which is a sign of increasing profitability.
MCD's Profit Margin of 32.25% is amongst the best of the industry. MCD outperforms 98.52% of its industry peers.
MCD's Profit Margin has improved in the last couple of years.
MCD has a better Operating Margin (45.67%) than 100.00% of its industry peers.
In the last couple of years the Operating Margin of MCD has grown nicely.
MCD has a Gross Margin of 56.97%. This is in the better half of the industry: MCD outperforms 63.70% of its industry peers.
In the last couple of years the Gross Margin of MCD has grown nicely.

Every day, new Best Dividend stocks can be found on ChartMill in our Best Dividend screener.

For an up to date full fundamental analysis you can check the fundamental report of MCD

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.