Published Wed, 30 Aug 2017 06:32:10 -0400 on Seeking Alpha
McDonald's (NYSE: MCD) is on a roll and is set to continue offering nice total shareholder returns of more than 12% annually over the next five years. Moreover, investors buying into the name now, will soon experience a nice 6.4-8.5% bump to their dividend.
The world's largest restaurant chain by revenue has been hiking its dividend for 40 years in a row and is set to lengthen its streak this September. Some of these years the growth rate was truly staggering -- increasing by 70% in 2003 and 50% in both 2006 and 2007. Naturally, this kind of growth rate was not sustainable and in recent years it has slowed down to a more modest 5-7% level.
MCD data by YCharts
In addition to receiving a quarterly dividend, investors want capital appreciation. Certainly, there have been some lean years in that regard historically but the last year, this stock has been on a tear. You will have to look a while before finding a global low beta brand name that has appreciated by close to 40% in a year.
Over the last five years investors have gotten an average annual capital appreciation of 12%. Adding in an annual yield of around 3%, its shareholders have enjoyed a very competitive total return of 15% annually.
Historical Dividend Growth 1976 was the year McDonald's started paying dividends. Ever since, it has not only paid dividends, but increased them every year. This unbroken dividend growth record has earned it a place among the Dividend Aristocrats.
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