McDonald’s Stock Beats Inflation… Again!

Dividends Forever
4 min readOct 15, 2022

This week, McDonald’s raised their dividend by 10%.

Shares now yield $6.08 annually, with quarterly payments of $1.52.

McDonald’s has paid consistent, rising dividends for the past 46 years. And the stock has continually rewarded shareholders with both income and capital appreciation.

If you bought $100 of McDonald’s stock in 2007, right before the Global Financial Crisis, your investment would now be worth $415.48.

Even with some of the worst market timing imaginable, you’d still have a quadruple-bagger on your hands. And you would have beaten the S&P 500 by almost 4% annually.

Here’s why I believe McDonald’s shareholders have enjoyed such impressive returns.

Innovation

For most of my adult life, I lived in Vietnam. The one country on Earth where McDonald’s failed to find success. And even before that, I rarely ate fast food. So, I hadn’t entered a McDonald’s restaurant at any point between 2011 and 2019.

My perception of McDonald’s came from the late 2000’s. Mainly, that restaurants were gross and dirty.

In 2019, I was visited my parents for Christmas and the power went out at their house. Needing to get some late-night work done, I went to the only place open — McDonald’s.

It was shocking.

McDonald’s went from being dirty, with trash strewn everywhere and clogged toilets, to being kind of like Starbucks. The restaurant was brightly lit, the booths were clean, and the people working there were friendly.

It was a whole different experience than the McDonald’s of 10+ years ago.

In 2015, McDonald’s faced a major crisis. The company had suffered 5 consecutive quarters of negative earnings growth. The restaurant tried to shake things up by unveiling a line of gourmet burgers and premium ingredients (like guacamole), but these flopped.

So, McDonald’s changed their strategy and got a new CEO, Steve Easterbrook, who decided to treat McDonald’s like a tech company — pushing for innovation.

The fast food chain embraced home delivery, implemented new touchscreen kiosks to reduce staffing requirements…

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