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How McDonald's Has Become Such A Market Force

1) Some $4.71 billion worth of the company’s stock is held by ETFs. Why? The company boasts a dividend yield of 3.18%. The burger chain was recently named a Top 25 ”Dividend Giant” by ETF Channel.

2) The $2.87 per share dividend paid out in 2012 is 75% higher than the amount paid in 2008, McDonald’s CFO Peter Bensen noted at a recent Jeffries Global Consumer Conference. (Transcript)

3) During the past five years, McDonald’s has returned more than $27 billion to shareholders in buybacks and dividends.

4) McDonald’s the landlord: While the company’s menu strategy gets most of the attention, the chain generates huge real estate rental fees and royalties from its franchisees. That’s steady cash that doesn’t fluctuate all that much.

5) That cash is being reinvested in a big way. The company is investing $3.2 billion this year—50% of which will underwrite new 1,500 to 1,600 restaurants in the US, Europe and emerging markets.

6) Corporate critics keep prodding McDonald’s to be more daring with its menu options. It tends to be cautious, and for good reason. Its core products—the Hamburger, Cheeseburger, Chicken Nuggets and the Big Mac--are billion dollar brands that generate 28% of all U.S. sales, according to Jeff Stratton, President of McDonald’s USA.

 

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