Balancing Dividends and Fundamentals: The Case of NYSE:MCD.

Our stock screener has singled out MCDONALD'S CORP (NYSE:MCD) as a promising choice for dividend investors. NYSE:MCD not only scores well in profitability, solvency, and liquidity but also offers a decent dividend. We'll explore this further.

What does the Dividend looks like for NYSE:MCD

ChartMill assigns a Dividend Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing various dividend elements, such as yield, historical performance, dividend growth, and sustainability. NYSE:MCD has been awarded a 7 for its dividend quality:

• Compared to an average industry Dividend Yield of 2.82, MCD pays a better dividend. On top of this MCD pays more dividend than 83.58% of the companies listed in the same industry.
• On average, the dividend of MCD grows each year by 8.37%, which is quite nice.
• MCD has been paying a dividend for at least 10 years, so it has a reliable track record.
• MCD has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.

Unpacking NYSE:MCD's Health Rating

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:MCD has received a 6 out of 10:

• MCD has an Altman-Z score of 5.06. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
• MCD has a better Altman-Z score (5.06) than 88.81% of its industry peers.
• MCD has a better Debt to FCF ratio (5.43) than 75.37% of its industry peers.
• MCD has a better Current ratio (1.08) than 61.19% of its industry peers.
• MCD's Quick ratio of 1.06 is fine compared to the rest of the industry. MCD outperforms 62.69% of its industry peers.

How do we evaluate the Profitability for NYSE:MCD?

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:MCD has achieved a 9:

• With an excellent Return On Assets value of 15.44%, MCD belongs to the best of the industry, outperforming 92.54% of the companies in the same industry.
• With an excellent Return On Invested Capital value of 18.79%, MCD belongs to the best of the industry, outperforming 91.79% of the companies in the same industry.
• MCD had an Average Return On Invested Capital over the past 3 years of 17.45%. This is significantly above the industry average of 10.14%.
• The 3 year average ROIC (17.45%) for MCD is below the current ROIC(18.79%), indicating increased profibility in the last year.
• With an excellent Profit Margin value of 32.25%, MCD belongs to the best of the industry, outperforming 98.51% of the companies in the same industry.
• MCD's Profit Margin has improved in the last couple of years.
• With an excellent Operating Margin value of 45.67%, MCD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
• In the last couple of years the Operating Margin of MCD has grown nicely.
• MCD has a Gross Margin of 56.97%. This is in the better half of the industry: MCD outperforms 64.93% of its industry peers.
• MCD's Gross Margin has improved in the last couple of years.

More Best Dividend stocks can be found in our Best Dividend screener.

Our latest full fundamental report of MCD contains the most current fundamental analsysis.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.