McDonald’s Dividend Under Realistic Bad Conditions

I’ve been studying McDonald’s this morning and checking out how the terms are different for the folks that buy shares of the stock compared to the early 2000s when the starting dividend yield was under 1% (of course, McDonald’s was an awesome investment for everyone who bought the stock in 2001, as it has returned 12% annually since then, turning $10,000 into $45,398).

But when you invested back then, you needed the substantial growth to happen—you weren’t going to rely on the dividend yielding less than 1% to be a substantial part of your returns.

Here in 2014, McDonald’s investors are working from a higher base, such that even if you only get moderate growth from the dividend, you’re still getting significant downside protection.

All an illustration: Right now, McDonald’s is sending out $0.81 to owners every three months for every share they get attached to their name. At an … Read the rest of this article!