McDonald’s Corp (McDonald's Corporation (NYSE:MCD)) announced that its domestic U.S. sales dropped 4% in February. That’s bad. Really bad. And it probably won’t get better for a while.
A battleship this size cannot turn on a dime, and McDonald’s will have a hard time reinventing itself as the healthy Chipotle (NYSE:CMG)) of fast-food burger joints.
But while McDonald’s has its problems, it’s commitment to shareholders is hard to match.
The dividend growth numbers are almost ridiculous. After growing its dividend at a 23% annual clip over the past 10 years, long-term investors now enjoy a yield on their original cost of 27.1%.
The rate of dividend growth has slowed in recent years, and I don’t expect to see annualized growth anywhere near those historical levels again. But they show that McDonald’s is committed to its shareholders, and I have no doubt that management will find a way to continue growing the dividend in the years ahead, even if it is at a more modest 5% per year.
And frankly, the 3.5% current dividend yield is a lot higher than what you’ll get in most other “income” securities. It’s certainly higher than the current dividend yield on the Utilities Select Sector SPDR ETF (NYSE:XLU) and on several of the larger REITs.