These 2 Sector Powerhouses Just Declared Dividend Raises

The final earnings season of 2025 is upon us. Since companies routinely fold dividend declarations into their earnings reports, there have inevitably been more than a few dividend raises lately.

Two hikes came from notable companies in their respective sectors -- high-profile financial services mainstay PayPal (NASDAQ: PYPL), and fast food leader McDonald's (NYSE: MCD). Let's take a closer look at both of these increases.

1. PayPal

PayPal made the ultimate dividend raise, essentially lifting its payout from $0. That's because it declared its first-ever shareholder distribution at the end of October. This is to be paid quarterly, and the first disbursement is $0.14 per share. The company's goal is to devote 10% of its adjusted net income.

Image source: PayPal.

Optimism is in the air with PayPal, particularly after the company published the third-quarter results that included the dividend raise declaration. It had a fine quarter, with net revenue growing by 6% to $8.4 billion, on total payment volume that rose by 8% to $458 billion.

The company's recent shift to focusing on higher-value transactions rather than racking up modest purchases seems to be working, too. Non-GAAP (adjusted) net income landed at $1.29 billion. This was 5% higher year over year. That's quite a solid growth figure given that PayPal is well established, and at the same time has plenty of competition in the modern payments space.

Still, management obviously feels that it's headed in the right direction to compete strongly, and I'd agree.

Along with the encouraging fundamentals and dividend raise, PayPal's earnings report also included a hike in full-year 2025 profitability guidance. Collectively, analysts tracking the stock are modeling 15% profitability growth from 2024, on revenue that should rise by almost 5% this year. Those anticipated rates for 2026 are 9% and 6%, respectively.

PayPal's inaugural dividend will be handed out on Dec. 10 to shareholders of record as of Nov. 19. At the most recent closing share price, it would yield 0.8%.

2. McDonald's

In sharp contrast to PayPal, McDonald's is a longtime dividend payer and raiser. It's on the cusp of becoming a Dividend King -- one of the few publicly traded companies that has lifted its payout at least once annually for a minimum of 50 years running.

Image source: Getty Images.

Consecutive dividend raise No. 49, declared toward the end of October, was a 5% bump to a new quarterly amount of $1.86 per share.

At this point, McDonald's is a powerhouse global brand that's usually the first name leaping to mind when the words "fast food" are spoken. What makes the company's business so lucrative is the enduring cleverness of its franchise-heavy business model -- nearly all of its outlets are owned and managed by outside entities, and it makes money largely by supplying them with operational assets.

In recent years, a strong concentration on making its restaurants as technically up-to-date (and efficient) as possible has helped boost the company's fundamentals. In its most recently reported quarter, McDonald's delivered 5% year-over-year revenue growth, to $6.8 billion. Adjusted net profit saw a tastier boost, rising at a 7% pace to hit nearly $2.3 billion.

In its earnings release, the company quoted CEO Chris Kempczinski as saying that this performance was due to "compelling value, standout marketing, and menu innovation -- proving again that when we stay focused on executing what matters most to our customers, we grow."

Corporate hype aside, I'd say that's a reasonably accurate take on the roots of McDonald's success over the past few years. This stock, then, feels like quite a safe and profitable investment, especially over the long term. McDonald's enhanced dividend will be served up on Dec. 15 to investors of record as of Dec. 1. It yields a theoretical 2.5%.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends PayPal. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short December 2025 $75 calls on PayPal. The Motley Fool has a disclosure policy.