McDonald’s Stock: Past Five Years of Dividends

After I recently profiled IBM to examine one of the worst scenarios with a dividend growth investing strategy over the past five years, I thought I would take a look at another company that has fallen out of favor during the same period despite showing many of the characteristics of an excellent investment back in 2011. I’m talking, of course, about fast-food giant McDonald’s Corporation (MCD).

Back in 2011, the stock was on a roll. It had delivered 18% annual returns in the previous decade, 14.5% earnings growth, 17.5% dividend growth, was paying out a 3% dividend, was earning $5 billion in profits, only half were paying paid out as dividends, only had $12 billion in debt, and was sporting insane net margins in the 20% because of the lucrative contract arrangements with its franchisor-franchisee business model in which 83% of locations are independently owned and operated.

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