Many years ago, I bought McDonald's Corporation stock when the company was trading at $225 per share and offering a starting dividend yield of 2.5%.

Today, McDonald’s trades at $276 per share and offers a 2.71% starting yield.

That’s the power of consistent dividend growth.

McDonald's Corporation ($MCD) needs no introduction. It’s the world’s largest fast-food chain by revenue. The company serves roughly 47 million customers each day. And it’s also the world’s largest distributor of toys, giving away more than 1.5 billion each year through Happy Meals.

After trading well above $300 per share for quite a while, McDonald’s stock has finally pulled back, with shares down more than 12% year-to-date.

With the stock near its 52-week low and yielding almost 3%, today’s report looks at whether McDonald’s is worth buying. Let’s start with why shares are selling off, then pivot to the company’s long-term fundamentals.

McDonald’s is facing many of the same headwinds as other consumer staples businesses. Inflation and rising gas prices have reduced discretionary spending, and the company has seen a decline in traffic. Additionally, the stock saw over $23 million in insider sales this quarter, something that often concerns Wall Street. Finally, tariffs and geopolitical risks have also weighed on shares.

A lot of these factors feel like generic talking points that could apply to many businesses. It’s a bit like 2022, when inflation dominated headlines. Or 2021, when every investor presentation included lengthy sections on social distancing and COVID precautions.

That doesn’t mean McDonald’s isn’t facing headwinds, but many of its short-term problems are the same challenges nearly every business is currently dealing with.

McDonald’s went public in 1965. It has faced inflation, changing consumer habits, geopolitical shocks, and recessions before. In fact, the company has navigated these issues so well that one share purchased on the day of its 1965 IPO would now be worth over $200,000. That figure does not include dividends or dividend reinvestment.

Over the past 20 years, a period that includes the Great Recession, McDonald’s stock delivered an average annual total return of 13.97%, outperforming the general market.

After the recent selloff, McDonald’s currently trades at a price to earnings ratio of 21.18, slightly lower than the S&P 500. The company also offers a 2.71% starting dividend yield, backed by a 5-year compound annual dividend growth rate of 7.40% and supported by a safe payout ratio of 58.74%.

McDonald’s has raised its dividend every year for 49 consecutive years, and its conservative payout ratio means there is still plenty of room for future increases.

In March 2022, McDonald’s stock was in a slump because of inflation and “changing consumer habits.” By March 2025, shares had delivered an 11.07% average annual total return. Put another way, with dividends reinvested, an investor who bought the March 2022 dip was up more than 37.01% by 2025. Not a market-beater, but still double-digit annualized growth from a blue-chip business.

McDonald’s never seems to get cheap enough to become a true value stock, but it consistently delivers strong dividend growth along with solid long-term returns that tend to beat the market over multiple decades.

With shares near their 52-week low and the stock yielding almost 3%, I’d be interested in adding to my position.

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Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.