Exploring NYSE:MCD's dividend characteristics.

Our stock screener has singled out MCDONALD'S CORP (NYSE:MCD) as a promising choice for dividend investors. NYSE:MCD not only scores well in profitability, solvency, and liquidity but also offers a decent dividend. We'll explore this further.

Deciphering NYSE:MCD's Dividend Rating

ChartMill employs its own Dividend Rating system for all stocks. This score, on a scale of 0 to 10, is determined by evaluating different dividend factors, such as yield, historical performance, dividend growth, and sustainability. NYSE:MCD has been assigned a 7 for dividend:

• Compared to an average industry Dividend Yield of 3.12, MCD pays a better dividend. On top of this MCD pays more dividend than 82.44% of the companies listed in the same industry.
• On average, the dividend of MCD grows each year by 7.40%, which is quite nice.
• 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.
• MCD's earnings are growing more than its dividend. This makes the dividend growth sustainable.

Looking at the Health

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:MCD has earned a 5 out of 10:

• Looking at the Debt to FCF ratio, with a value of 5.76, MCD is in the better half of the industry, outperforming 70.99% of the companies in the same industry.
• MCD has a better Current ratio (1.19) than 62.60% of its industry peers.
• Looking at the Quick ratio, with a value of 1.19, MCD is in the better half of the industry, outperforming 64.12% of the companies in the same industry.

Analyzing Profitability Metrics

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:MCD was assigned a score of 9 for profitability:

• Looking at the Return On Assets, with a value of 14.90%, MCD belongs to the top of the industry, outperforming 93.89% of the companies in the same industry.
• The Return On Invested Capital of MCD (18.47%) is better than 91.60% of its industry peers.
• MCD had an Average Return On Invested Capital over the past 3 years of 18.38%. This is significantly above the industry average of 10.64%.
• The 3 year average ROIC (18.38%) for MCD is below the current ROIC(18.47%), indicating increased profibility in the last year.
• MCD has a Profit Margin of 31.72%. This is amongst the best in the industry. MCD outperforms 100.00% of its industry peers.
• MCD's Profit Margin has improved in the last couple of years.
• MCD's Operating Margin of 45.73% is amongst the best of the industry. MCD outperforms 100.00% of its industry peers.
• In the last couple of years the Operating Margin of MCD has grown nicely.
• The Gross Margin of MCD (56.75%) is better than 67.18% of its industry peers.
• In the last couple of years the Gross Margin of MCD has grown nicely.

Our Best Dividend screener lists more Best Dividend stocks and is updated daily.

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

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.