McDonald's reported mixed results in its 2026 third-quarter earnings, but the stock still rose 5% by midafternoon Nov 4.
The stock price is down roughly 9% on the year, but the fast-food operator has a dividend yield of 2.7%.
For $2,000 in yearly dividends, it would require owning about 260 shares.
McDonald's (NYSE: MCD) is fresh off reporting its 2026 third-quarter results. While it was a mixed bag, the stock price climbed over 5% by the afternoon of the report, suggesting the markets were somewhat pleased.
The company reported a 0.2% decrease in sales at its U.S. locations open for at least 13 months and missed CNBC-tracked analyst estimates of $7.2 billion in revenue, reporting $7.1 billion. McDonald's did, however, beat earnings per share (EPS) estimates of $3.38, reporting EPS of $3.57. It also reported net income of $2.4 billion, an increase from $2.2 billion in the prior-year period.
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For any investor who likes the results and sees McDonald's as an investment candidate, or for a current shareholder thinking about picking up more shares, a bonus of owning the stock is that it pays a dividend. It yields a respectable 2.7%, so we can run through a hypothetical example of how many shares it would take to generate $2,000 a year in dividend payouts.
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With a quarterly dividend payout of $1.93, it would require about 260 shares of McDonald's to receive $500 per quarter, totaling a yearly dividend of $2,000.
With an opening price of $268.79 on Nov. 4, acquiring those 260 shares would cost around $69,885.
Small investments can compound over time, so even if only a handful of shares are purchased initially, they can add up. That said, I would still feel comfortable sitting on the sidelines and waiting to invest in McDonald's. The stock price is down 9% in 2026, and the fast-food operator is still trying to figure out how to boost sales at its U.S. locations.
It's working on new value member options, which it plans to roll out across U.S. stores in early 2027, potentially bringing in more traffic and boosting sales. But it'll be a few months before we see how that works out. In the meantime, despite the one-day gains after its earnings report, the stock price could still struggle. And with stock price losses, that can overall negate some of that quarterly income generated.
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Jack Delaney 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.