Meet the (Almost) Dividend King with a 49-Year Streak That Wall Street Is Sleeping On
Key Points
A company’s dividend history is no guarantee of that dividend’s future.
That history, however, is still a reasonable indication of what’s likely to materialize in the future, particularly when the underlying business works as well as it ever has.
Less than four months away from becoming a Dividend King, this beaten-down ticker could soon experience rekindled bullish interest.
- 10 stocks we like better than McDonald's ›
Need reliable dividend income? Wall Street usually steers investors to the best ones to buy. Now and then, though, it misses one.
That's what seems to be the case here. Down 20% from its February peak and still dancing with new 52-week lows, this blue chip stock's forward-looking dividend yield now stands at a multiyear high of 2.8%. And that's based on a dividend, by the way, that's now been raised every year for the past 49 years, leaving it one year shy of attaining the title of Dividend King, or stocks that have increased their per-share payment for at least 50 straight years.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
There's no end to this streak in sight either. The underlying company is a fast-food restaurant chain, McDonald's (NYSE: MCD).
Image source: Getty Images
Built to last
There are more than 45,000 golden arches peppered across the world, with most of them run by franchisees, even though the parent company technically owns the majority of the buildings and land where these stores operate. That's a big reason for the dividend's persistent growth, too -- one of the company's biggest sources of revenue is the market-based rent it charges its franchisees.
So why has the stock fallen as much as it has? Mostly because its core customers have been getting squeezed by inflation, pushing them to purchase more lower-margin value-priced items on the menu. Management is concerned that the economic backdrop could worsen before it gets better, too. Investors haven't wanted to stick around to find out.
Buy the dip
Just don't sweat it too much. This isn't a cycle the company hasn't been through dozens of times before. It always bounces back because it's a well-loved brand selling a consumer product that's always in demand. McDonald's just needs to figure out how to best navigate the headwind.
Indeed, pullbacks like the recent one have been great entry points for this stock, which could be crowned a true Dividend King by the end of October.
Should you buy stock in McDonald's right now?
Before you buy stock in McDonald's, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and McDonald's wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $371,842!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,244,783!*
Now, it’s worth noting Stock Advisor’s total average return is 900% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of July 19, 2026.
James Brumley has no position in any of the stocks mentioned. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.
Recommended Articles
