With fears of artificial intelligence being a disruptive force taking many software stocks by storm in recent weeks, many investors are likely looking for some investments that are a bit more risk-averse. One stock idea that could provide a nice counterweight to the riskier software-as-a-service stocks hammered in recent weeks is McDonald's (MCD 0.40%). The fast-food giant has not only provided shareholders with rewarding long-term share price appreciation, but it also boasts a solid dividend, and it's increased this steady cash payout for 49 consecutive years, putting it one dividend increase away from becoming a Dividend King (a company that has raised its dividend for at least 50 consecutive years). Performance like this is evidence of the company's incredible staying power, and a reason to consider buying the stock.
Further, the company's just-published quarterly results offer a fresh reminder of how the company continues to grow sales and earnings, even as some other restaurant stocks are struggling.
Here's a closer look at how McDonald's latest results show why this stock is likely worth buying and holding for the next 10 years.
Image source: Getty Images.
Accelerating growth
McDonald's just closed the books on 2025 with an exceptional fourth quarter. Revenue during the period rose 10% year over year -- a huge acceleration from the company's 3% growth in Q3.
The quarter's impressive sales growth was driven by a significant acceleration in comparable sales in the U.S. Comparable sales in the company's home market rose 6.8% year over year in Q4. This compares to just 2.4% comparable sales growth in Q3 in the U.S.
McDonald's recent success can be credited to an increasing emphasis on value.
"By listening to customers and taking action, we have improved traffic and strengthened our value & affordability scores," said McDonald's CEO Chris Kempczinski in the company's fourth-quarter earnings release.
And this strategy is working beyond the U.S. The company's comparable sales in its International Operated Markets rose 5.2% year over year. Further, McDonald's global systemwide sales increased 11% year over year.
Also, McDonald's fast-growing loyalty program is a key driver of its business. Across the 70 markets where the company offers its loyalty program, systemwide sales to these loyalty members rose 20% year over year for the full year, management said. Additionally, the company said it has nearly 210 million 90-day active loyalty users, up 19% year over year.
NYSE: MCD
Key Data Points
A robust dividend
While this underlying business momentum is exciting, one of the great things McDonald's does for its shareholders is pay a meaningful dividend. With the help of a 5% boost to its dividend payout announced in October of last year, McDonald's dividend yield currently sits at 2.3% -- well above the S&P 500's 1.2% yield today.
Further, McDonald's notably has plenty of room to increase its dividend, even if its earnings growth slows. The company's payout ratio, or the percent of its earnings it pays out in dividends, is at about 60% today, leaving plenty of breathing room.
Of course, it doesn't look like McDonald's investors have to worry about poor earnings growth. The fast-food giant's earnings per share rose 8% year over year in Q4. Additionally, with a value menu strategy and a fast-growing loyalty program that resonates with customers and has recently driven a step-up in its top-line growth rate, there's good reason to expect the company to announce another dividend increase this year, putting the burger chain in great company with other Dividend Kings.
With a price-to-earnings ratio of about 27 as of this writing, the stock isn't cheap. But given the company's recent financial momentum and its long history of executing through all sorts of economic cycles, I believe this is a stock worth holding for the next decade -- especially for investors looking for dividend income. With that said, no company is perfect. McDonald's shareholders, therefore, will have to keep an eye on the company and make sure it maintains its strong competitive position in an intensely competitive restaurant industry.
