Big Mac on the dividend: what to do with McDonald’s stock?

By: Trademagazin Date: 2025. 07. 29. 11:17

Buy or just eat? This is the question that is currently on the minds of investors who are examining McDonald’s shares in a volatile market environment. Demand for hamburgers remains stable, but the share price has corrected from a mid-year peak of $321 to $299. The weakness is mainly due to the decline in North American traffic and rising labor and raw material costs. At the same time, the company’s long-term outlook remains favorable, with analysts saying the current decline is more likely to be temporary, and the stock remains a stable, dividend-paying element of a defensive portfolio – writes vg.hu.

McDonald’s appeal is given by its predictable dividend policy and global presence. The company operates franchise units in more than a hundred countries and has successfully weathered crises in recent decades – be it the 2008 financial collapse or the 2020 Covid crisis. The Russian market also handled the loss in 2022 without any major shocks. The 2.4 percent dividend yield and 24 times P/E ratio indicate that, although there is some overvaluation risk, the stock remains an attractive option for long-term investors.

However, the challenges are not negligible. The increasing competition in the US market (Wendy’s, Burger King, Chipotle, KFC, etc.) and the shift in consumer preferences towards a healthier lifestyle require new adaptations. McDonald’s is trying to respond to these: its technological innovations – such as a mobile app, digital ordering, automated service – are setting industry standards, while the menu is increasingly diverse and health-conscious. The company’s operating profit margin has stabilized above 40 percent, and the net profit margin is 33 percent this year, which it is forecast to increase to 35 percent by 2027.

Overall, McDonald’s stock does not offer explosive growth, but after the current market correction, it may return to an attractive level for those looking for safe, dividend-based investments. Target prices range between $290 and $310, which suggests that the current price level could be a mid-term entry point for fans of defensive sectors.