Top Dow Stock McDonald’s Raises Dividend Again

McDonald’s [[MCD]] announced today that the company will increase their quarterly dividend by 11 percent to $.61 per share.


The dividend increase will take place in December and will push the yield on MCD shares to 3.2 percent based on yesterday’s closing price.


McDonald’s has been our top Dow stock pick in 2010 and has gained an impressive 20 percent since the beginning of the year. The Dow Jones index has only managed to post a 3 percent gain in 2010.


The ubiquitous restaurant chain initiated their dividend program in 1976 and has increased their dividend every year since then. This puts McDonald’s in the elite group of Dividend Aristocrat stocks that have increased their dividends for at least 25 consecutive years.


McDonald’s Chief Executive Officer Jim Skinner said, “With today’s announced dividend increase, we expect the 2010 total cash returned to shareholders to be approximately $5 billion, split between dividends and share repurchases.”


Skinner continued, “Our ongoing financial performance reflects the strength of the McDonald’s system and resilience of our Plan to Win. We remain committed to maintaining financial discipline and enhancing shareholder value. Our first priority is to reinvest in our business by allocating capital where we expect to drive sales and cash flow, generating strong returns. After these investment opportunities, we expect to return all of our free cash flow to shareholders over the long term through dividends and share repurchases. Today’s dividend increase demonstrates our confidence in the long-term strength of our Brand.”


The dividend will be payable on December 15, 2010 to shareholders of record as of December 1, 2010.


McDonald’s dividend announcement comes on the heels of a much-anticipated dividend increase from Microsoft earlier this week.

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