Should You Buy McDonald's Stock Before Aug. 4?
Key Points
McDonald's stock has declined more than 11% in 2026.
The fast food franchise is on the verge of becoming a Dividend King as it nears 50 years of consecutive dividend increases.
- 10 stocks we like better than McDonald's ›
Investors would love to see a hot, fresh serving of growth from McDonald's (NYSE: MCD) next week, when the global fast-food franchise reports second-quarter earnings. What they're more likely to get is a lukewarm delivery of the status quo. So, should you buy the stock before Aug. 4?
McDonald's is down more than 12% year to date. The restaurant chain has struggled to find anything more than tepid growth. In the first quarter of 2026, global comparable sales increased just 3.8%. Moreover, McDonald's management expects a "meaningful deceleration" in the second quarter, largely driven by last year's Minecraft Happy Meal promotion that brought in unusually high foot traffic and sales.
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The stock reflects that lack of enthusiasm, with shares trading near a 52-week low. Still, McDonald's is a reasonable buy for long-term investors. The company has a resilient franchise model with more than 44,000 locations across more than 100 countries.
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With the stock down as much as it is, it also looks relatively inexpensive right now. The stock's forward price-to-earnings (P/E) ratio is around 21, and McDonald's continues to pay a strong and growing dividend. Currently, McDonald's provides shareholders a quarterly payout of $1.86 per share.
McDonald's is on the verge of becoming a Dividend King, which is a company that has raised dividends for 50 consecutive years. The hamburger-and-fries American staple has raised its dividend for 49 years now and could hit the shareholder milestone at the end of 2026.
McDonald's is still a buy, but I'm not sure there is any urgency to purchase ahead of earnings on Aug. 4. If the company does see a decline in sales, the stock may dip further in the near term. McDonald's is well suited for investors looking to add decent income to their portfolios at a cheap price. For those focused on growth, there are plenty of other alternatives in the consumer discretionary space.
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Catie Hogan 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.
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