Northcoast Research has revised its rating on McDonald’s from “Buy” to “Neutral,” citing concerns over the company’s ability to effectively convert sales into earnings. The downgrade reflects challenges in maintaining profit margins amidst rising operational costs and a consumer base increasingly focused on value.
📊 The firm’s analysis suggests that McDonald’s shares are currently trading just below what is considered fair value, given its revised outlook for 2025 and expectations of modest earnings growth in the upcoming year. Consequently, Northcoast has adopted a less optimistic stance on the fast-food giant, citing ongoing margin pressures that could limit potential gains.
💰 Dividend Fundamentals
💵 Annual dividend per share: \$6.77
📈 Dividend yield: Approximately 2.27%
📈 Dividend growth rate (5-year CAGR): 7.43%
📆 Consecutive years of dividend increases: 34
📊 Payout ratio: 59.23%
📌 Despite the downgrade, McDonald’s maintains a strong dividend profile, with a consistent history of annual increases and a sustainable payout ratio. The company’s commitment to returning value to shareholders remains evident through its dividend strategy.