This Dow Stock (and Soon-to-Be Dividend King) Recently Hit a 52-Week Low. Here's the Case for Buying It Anyway.

Stepping into a falling stock is never entirely comfortable. Even if it's a blue chip name, you can never really know until later precisely when it reached the bottom of its trough.

Nevertheless, for long-term, high-quality prospects, the time to buy is when they're on sale.

With that as the backdrop, discount-minded income investors looking for a new holding might want to consider adding fast-food restaurant stock and Dow component McDonald's (NYSE: MCD) after the run-in it had with a new 52-week low last month.

Finally forced to fix what's broken

The burger giant has obviously been struggling all year. We were reminded why earlier this month, when CEO Chris Kempczinski acknowledged that the "constrained consumer environment" had taken a toll on traffic, resulting in disappointing systemwide same-store sales growth of only 1.3% and domestic same-store sales growth of only 0.8%.

Image source: Getty Images.

As the adage goes, though, it's always darkest before dawn. As CFO Ian Borden put it during the second-quarter earnings conference call, "We're acting with urgency to improve our baseline guest traffic and put the U.S. business in a stronger position as we exit 2026."

Then there's the other thing.

Impending improvement of its dividend profile

Clearly, the company has a couple of things to figure out about navigating the current consumer environment. McDonald's dividend wasn't and isn't in any real jeopardy, however. The stock's 21% pullback from its late-February peak simply pumped its forward dividend yield up to 2.8%.

That's based on a dividend, by the way, that has been raised annually for 49 consecutive years.

And this might be the biggest reason of all to dive in here. Assuming it announces its next payout hike in September or October, as it has for years now, McDonald's is no more than two months away from almost certainly announcing its 50th consecutive year of per-share dividend growth, qualifying it as one of the market's very few Dividend Kings -- companies that have raised dividends for 50 or more straight years. This alone could spark a recovery rally, as the mutual funds and exchange-traded funds designed to own all the companies that have achieved that feat will need to make sizable purchases of this stock.

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.