In 2Q16 and 3Q16, Wall Street analysts are expecting McDonald’s (MCD) to pay a dividend of $0.89, the same as in 1Q16. In 4Q16, they’re expecting the company’s dividend to rise to $0.94. Overall for fiscal 2016, dividends are expected to total $3.60, a rise of 4.8% from $3.40 in 2015. In 1Q17, analysts are expecting McDonald’s to pay dividends of $0.94 to its shareholders.
The dividend yield for 2Q16 is expected to be 2.8%, and for the next 12 months, it’s expected to be 3%. For the next 12 months, McDonald’s peers Wendy’s Company (WEN), Jack in the Box (JACK), and Restaurant Brands International (QSR) are expected to have dividend yields of 2.8%, 1.4%, and 1.6%, respectively. A company’s dividend yield indicates how much the company pays out in dividends each year relative to its share price.
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 1Q16, the company had returned $20.3 billion, which leaves $9.7 billion in combined dividends and share repurchases to be completed in 2016. Share repurchases decrease shares outstanding, boosting earnings per share.
In the next part of this series, we’ll look at McDonald’s price-to-earnings ratio.