Leading fast food chain,
), recently hiked its quarterly dividend by 4 cents to 81 cents
per share, a 5.0% increase from the prior dividend payout. This
equates to an annual payout of $3.24 per share, up from $3.08 per
McDonald's has a consistent track record of not only paying
quarterly dividends but also increasing the same every year,
since the inception of its dividend payout program in 1976. The
latest hike brings the forward annual dividend yield, as of
Sep18, 2013, to 3.28%. The first increased quarterly dividend
will be paid on Dec 16, 2013, to stockholders of record as of Dec
The current rise comes exactly after a year of its prior
dividend increase declared in Sep 20, 2012 (from 70 cents to 77
cents, which was paid on Dec 17, 2012). Prior to that, McDonald's
had increased its quarterly dividend by 15%, 11% and 10% in Sep
2011, Sep 2010 and Sep 2009, respectively.
Frisch's Restaurants Inc.
) increased its quarterly dividend by 12.5% to 18 cents per share
in Sep 12, 2013. In fact, McDonald's' current annualized dividend
yield inched past Frisch's' forward annualized dividend yield of
3.18% as of Sep 18, 2013. Yet another behemoth in this sector,
Brinker International Inc.
) also hiked its quarterly dividend by 20% to 24 cents per share
in Aug 22, 2013.
McDonald's has consistently enhanced shareholders' return via
share repurchases and dividends. The company repurchased shares
worth $2.6 billion and $3.4 billion in 2011 and 2012,
respectively. In fact, during the past five years ended 2012, it
has returned over $27 billion to shareholders in the form of
share repurchases and dividend payments. In 2013, the company
expects to return about $4.5 billion-$5.0 billion in cash to
shareholders via dividends and stock buybacks.
McDonald's carries a Zacks Rank #4 (Sell). We are encouraged
by the company's strong market share position in the restaurant
categories. Its offerings have reached the billion-dollar brand
status through sustained product innovation and geographic
expansion. These growth initiatives combined with the
re-franchising strategy bode well for the company's long-term
However, the company is caught up with difficulties like the
implementation of austerity measures in Europe owing to the
sovereign debt crisis, increasing commodity costs in the U.S. and
decelerating growth in Asia.
Other Stocks to Consider
A popular player in the restaurant industry that looks
attractive at the current levels is
AFC Enterprises Inc.
), carrying a Zacks Rank #2 (Buy).
AFC ENTERPRISES (AFCE): Free Stock Analysis
BRINKER INTL (EAT): Free Stock Analysis
FRISCHS RESTAUR (FRS): Get Free Report
MCDONALDS CORP (MCD): Free Stock Analysis
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