McDonald's reported Q2 revenue of $7.1B, up 4% YoY, as it targets becoming a Dividend King with its 50th consecutive annual dividend increase in Q4.
McDonald's reported second-quarter systemwide sales of $37 billion, up 5% from a year earlier, as same-store sales rose 1.3%. The company's own revenue came in at roughly $7.1 billion, a 4% increase, while earnings per share climbed 6% to $3.32, the fast-food giant said in its latest filing.
The results arrived as McDonald's sits on 49 consecutive annual dividend increases, a streak that extends back to the late 1970s. With a payout ratio near 60% and a current yield of about 2.9%, the company has room for another hike. The board typically announces the annual increase in the fourth quarter, and if it delivers a 50th consecutive raise, McDonald's would join the small list of Dividend Kings, companies that have raised dividends for at least 50 straight years. Motley Fool, which tracks the milestone, noted that no restaurant chain has achieved that status.
The business model that underpins the streak rests on franchising. About 95% of McDonald's more than 45,000 locations worldwide are run by franchisees, who pay rent and royalties. The company often owns the real estate underlying those restaurants, giving it a landlord-like revenue stream that has proved resilient even when consumer spending tightens. In the current inflationary environment, McDonald's has benefited as some diners trade down from higher-priced options, according to the filing.
McDonald's stock has fallen roughly 25% from its highs, pushing its price-to-sales and price-to-earnings multiples below their five-year averages. The pullback has made the valuation more attractive by historical measures, though the company still faces margin pressure from higher labor and commodity costs.
The stock carries an Alpha Score of 44 out of 100, labeled "Mixed," reflecting a neutral near-term setup relative to its Consumer Discretionary peers. Full details are available on the MCD stock page.
McDonald's typically announces its dividend increase in the fourth quarter, and a 50th consecutive raise would mark the milestone at year-end.
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