More outlets should fuel more hikes

Article Excerpt

MCDONALD’S CORP. $269 is a buy. This company (New York symbol MCD; Income-Growth Dividend Payer Portfolio, Consumer sector; Shares outstanding: 732.4 million; Market cap: $197.0 billion; Dividend yield: 2.3%; Dividend Sustainability Rating: Highest; www.mcdonalds.com) is the world’s largest fast-food chain with over 40,000 restaurants in 119 countries. It serves a wide variety of food but is best known for its hamburgers and french fries. With the December 2022 payment, McDonald’s raised your quarterly dividend by 10.1%, to $1.52 a share from $1.38. The new annual rate of $6.08 yields 2.3%. The company has now raised its annual dividend rate each year since 1976. McDonald’s opened roughly 1,700 new restaurants in 2022 and aims to open another 1,900 stores in 2023. Those new restaurants should lift its earnings in 2023 by 5% to $10.59 a share. The stock trades at a reasonable 25.4 times that estimate. McDonald’s Corp. is a buy. buy…