The dividend yield is at multiyear highs, and its valuation is at multiyear lows.
The dividend yield is at multiyear highs, and its valuation is at multiyear lows.
McDonald's (MCD -0.12%) is set to join fewer than 60 U.S. public companies as the newest Dividend King, a designation for companies that have paid and raised their dividends for at least 50 consecutive years. The fast food giant's latest quarterly payout of $1.93 per share marks a 4% increase over its prior payout. And at $7.72 per share -- McDonald's now has a forward dividend yield of 3.2% -- which is higher than most Dividend Kings and roughly triple the yield of the S&P 500 (^GSPC +0.41%).
Investors who own the stock by Dec. 1 will be eligible to receive the $1.93 per share payout on Dec. 15. Here's why McDonald's is one of the best restaurant stocks to buy now.
1. A franchise model executed to perfection
As of Dec. 31, 2025, 96% of McDonald's global store count of 45,356 were franchised -- including a 95% franchise rate in the U.S., 89% of international operated markets (mainly in Europe), and 100% of stores in China, Japan, Brazil, the Philippines, and South Korea.
McDonald's is nothing short of a global sensation. U.S. restaurants now make up just 30.2% of systemwide revenues -- making McDonald's primarily reliant on international markets.
The company's franchise strategy, paired with its global diversification, makes it increasingly resistant to recessions, especially if they are concentrated in a particular geography. Franchisees pay McDonald's a down payment for opening a restaurant, along with licensing fees, rent, royalties, and other expenses. And in exchange, the franchisee keeps the majority of store sales, unlocks McDonald's instantly recognizable global brand, benefits from its supply chain and marketing, and connects with its app, which has become an integral way to increase customer engagement through mobile ordering and rewards.
2. McDonald's FCF yield has soared to 4.5%
The franchise model generates predictable free cash flow (FCF) for McDonald's, helping it manage expenses and providing visibility into its dividend payments.
As you can see in the chart, McDonald's FCF yield of 4.5% is higher than its trailing dividend yield of 3.1%. Meaning that if McDonald's were to theoretically pass along all of its FCF to shareholders, it could afford a 4.5% dividend.
Averytin News Financial update.