Chief Investment Officer Jim Wright of Harvest Financial Partners expects McDonald’s Corporation (MCD) to grow its dividend, expand its store base and return a significant amount of money to shareholders in the next few years.
“That stock right now has a 3.5% yield, which they’ve grown at a midteens rate over the last five years. That dividend growth has been even faster than that over the last 10 years. We expect the company to probably grow its dividend in the high single digits,” Wright said.
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While McDonald’s has seen a slowdown in same store sales in the U.S., Wright says the big opportunity is in international markets.
“What we really like about McDonald’s is its tremendous global presence. There it has a huge opportunity to expand its store base and build out their franchisee base overseas,” Wright said.
Additionally, Wright says McDonald’s remains committed to returning money to shareholders.
“Over the next three years, they intend to return $18 billion to $20 billion to shareholders. That’s up from $15 billion over the last three years…I think what it represents is a management that’s committed to its shareholders and is comfortable with the growth opportunities out there,” Wright said.
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