ii view: McDonald’s hails own defensive qualities
An icon of global capitalism and boasting an enviable dividend track record. We assess prospects for this Dow Jones company.
5th November 2025 15:57
by Keith Bowman from interactive investor
Third-quarter results to 30 September
- Comparative global sales up 3.6%
- Revenue up 3% to $7.08 billion
- Adjusted earnings flat at $3.22 per share
- Fourth quarterly dividend of $1.86 per share, up 5% from Q3
Chief executive Chris Kempczinski said:
“We're fuelling momentum by delivering everyday value and affordability, menu innovation, and compelling marketing that continue to bring customers through our doors.”
- Invest with ii: Buy US Stocks from UK | Most-traded US Stocks | Cashback Offers
ii round-up:
McDonald's Corp (NYSE:MCD) has reported gains in comparable sales across all its regions, with head Chris Kempczinski highlighting the performance as “a testament to our ability to deliver sustainable growth even in a challenging environment.”
Product price increases helped total comparable sales gain 3.6% in the third quarter to late September. That included a gain of 2.4% for its core US market, exceeding Wall Street forecasts for a rise of 1.9%.
Shares in the Dow Jones company rose 3% in US trading having come into these latest results little changed over the last year. The Dow Jones index is up 11%. US and China focused Starbucks Corp (NASDAQ:SBUX) is down by close to fifth over that time.
McDonald's operates in more than 43,000 locations in over 100 countries. Comparable sales for overseas markets, led by Germany and Australia, rose 4.3% versus a 4% gain in the prior quarter.
International developmental sales on the same basis, including countries such as Japan, Brazil and China, increased 4.7%, down from 5.6% in Q2.
Total group-wide revenue rose 3% on a headline basis and 1% when stripped of currency changes to $7.08 billion. Adjusted earnings of $3.22 per share came in flat from a year ago, missing Wall Street forecasts for $3.33 per share.
The fast-food chain previously declared a quarterly dividend of $1.86 per share, up 5% from the previous quarter and payable to eligible shareholders on 15 December.
ii view:
Founded in 1955 and headquartered in Chicago, McDonald’s today sells burgers, fries, and many other fast-food items. The US generated most sales in 2024 at 49%. The 19 countries within the international operated division and including the UK, France and Canada, accounted for 41%. The 75 countries for the International Developmental business made up the balance of 10%.
Under its ‘Accelerating the Arches strategy’, McDonald’s is looking to build on areas including delivery, digital related sales and Drive-Thru. Competitors in its home US market include Wendy’s and Shake Shack. The group’s customer loyalty programme operates in 60 markets with around 175 million users.
For investors, the tough economic backdrop for markets such as the UK and France, and including elevated potential tax rises to ease government borrowing levels, should not be overlooked. Operational challenges such as a previous e-coli outbreak in the USA provide day-to-day risks. Geopolitical tensions resulting in the group’s previous withdrawal from Russia cannot be ignored, while costs such as those for wages have increased.
- Stockwatch: how much notice should we take of Warren Buffett?
- Goldman doesn’t see an AI bubble, but the pattern does look…familiar
- Where to invest in Q4 2025? Four experts have their say
On the upside, comparable sales gains for both overseas divisions contrast with sales declines in Q3 2024. US sales up 2.4% compare to a gain of just 0.3% a year ago. Expected full-year 2025 capital expenditure of over $3 billion is expected to include further openings in China, while a record of growing the dividend payment annually since 1976 leaves the shares on a forecast dividend yield of around 2.4%.
On balance, and while some caution looks sensible, this giant of the global fast-food sector appears to continue justifying its place in many already diversified investor portfolios.
Positives:
- Defensive value product offering
- Progressive dividend policy
Negatives:
- Cost pressures
- Subject to currency fluctuations
The average rating of stock market analysts:
Strong hold
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.