McDonald's Is Giving Investors a 20% Raise

McDonald's (NYSE: MCD  ) just posted some bleak second-quarter earnings results. Revenue and profits both missed expectations, and customer traffic fell in each of the major markets around the world. But there was at least one metric in the report that pointed higher for investors: cash returns to shareholders.

In the video below, Fool contributor Demitrios Kalogeropoulos discusses the restaurant chain's plans to send as much as $20 billion back to investors through 2016, or 20% more than the prior three-year period. However, with profit growth slipping, investors might wonder how the fast food giant can fund such a spending boost.

It won't come from shortchanging business investments, Demitrios notes, which is good news for long-term shareholders. Instead, McDonald's will be: 1) tapping into its growing operating cash flow; 2) taking on some new debt; and 3) refranchising as many as 1,500 company-owned locations to raise the extra cash. Watch the video for Demitrios' full take.

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Demitrios Kalogeropoulos

Demitrios covers consumer goods and media companies for, as well as broader moves in the economy.

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9/3/2015 4:00 PM
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McDonald's CAPS Rating: ***