If You'd Invested $1,000 in McDonald's 25 Years Ago, Here's How Much You'd Have Today
Key Points
Dividends made up the majority of McDonald's returns during that time.
A unique franchising model keeps growth steady.
- 10 stocks we like better than McDonald's ›
McDonald's (NYSE: MCD) has delivered strong performance over the last 25 years. Its approach to franchising has quietly given it market-beating returns over that time.
Image source: The Motley Fool.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Admittedly, its approach to franchising may make it seem less like a restaurant business on the surface. However, even if investors do not understand the model, they probably should not complain about the results. After investing $1,000 in the consumer discretionary stock 25 years ago, one would have $16,670 today.
Interestingly, around $10,000 of that return came from dividends, while the stock by itself slightly underperformed the S&P 500 during that period. McDonald's initiated its dividend in 1976 and has raised it every year since.
MCD data by YCharts
Moreover, it accomplished these gains with its unique approach to business. The majority of McDonald's restaurants are franchises, making it more asset-light than a restaurant like Chipotle, which owns and operates all of its restaurants.
Of course, franchising is hardly unusual in the restaurant business, but McDonald's has stood out for a heavy emphasis on brand consistency. Also, its revenue stream relies heavily on franchisee fees, including a 4%-5% fee on sales and a minimum 4% fee for advertising and promotions.
Still, it may surprise investors that much of its success may come from real estate investing rather than from serving food. It owns the building for every McDonald's. Thus, the rent is still paid even if the fast-food business is slow. As a result, McDonald's benefits from fairly steady revenue regardless of the state of the economy.
With that approach, the company has expanded to more than 45,000 restaurants across more than 100 countries, and such a size may spark concerns over global saturation. Nonetheless, rising rents and an increasing population can still help it expand, meaning investors should expect its business model to continue driving stock price and dividend gains for years to come.
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 $440,710!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!*
Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 213% 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 August 29, 2026.
Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's, short January 2028 $340 calls on McDonald's, and short September 2026 $35 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
Recommended Articles
