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What Do Analysts Expect for McDonald’s Dividends in 1Q16?

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Dividends

Wall Street analysts are expecting McDonald’s (MCD) to pay a dividend of $0.89 in the first three quarters of 2016. In 4Q16, they are expecting the company’s dividend to rise to $0.94. In 2016, dividends are expected to total $3.60, a rise of 4.8% from $3.40 in 2015. MCD forms 5% of the SPDR Dow Jones Industrial Average ETF (DIA).

Analysts are Expecting No Rise in McDonald's 1Q16 Dividends

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Dividend yields

The dividend yield for 1Q16 is expected to be 2.8%, and for the next 12 months, it’s expected to be 2.9%. McDonald’s peers Yum! Brands (YUM), Domino’s Pizza (DPZ), and Starbucks (SBUX) are expected to have dividend yields of 2.4%, 1.2%, and 1.5%, respectively. A company’s dividend yield indicates how much the company pays out in dividends each year relative to its share price.

Capital reallocation

McDonald’s management is expecting to return $30 billion to shareholders through share repurchases and dividends for the three-year period ending in 2016. By the end of 2015, the company had returned $15.8 billion, which leaves $14.2 billion in combined dividends and share repurchases to be completed in 2016. Share repurchases decrease shares outstanding, thus boosting earnings per share.

In the next part of this series, we’ll look at McDonald’s price-to-earnings ratio.

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