McDonald’s dividend
McDonald’s paid $7.17 per share in dividends in 2025; its $9.80 of free cash flow after stock-based pay per share covered that dividend. But dividends and buybacks together used 102.1% of real free cash flow in 2025, leaving less internally generated cash for modernization, acquisitions or debt repayment.
How much does McDonald’s pay in dividends?
The first forecast window contains four payments at the already declared $1.93 quarterly rate, producing $7.72 per share. The base case then reaches $8.12 and $8.53, using measured increases consistent with the company’s long record of annual raises. The bear case reaches $8.04 and $8.36 as modernization and traffic weakness restrain distribution growth. The bull reaches $8.20 and $8.69 because stronger cash generation makes faster increases affordable. Dividends already consume a large share of free cash flow, so a cut is possible in a severe downturn but is not assumed.
| Year to Dec 2025 | Year to Dec 2024 | Year to Dec 2023 | Year to Dec 2022 | Year to Dec 2021 | |
|---|---|---|---|---|---|
| Free cash flow per share (calculated) | 10.03 | 9.24 | 9.91 | 7.40 | 9.45 |
| Free cash flow after stock pay, per share (calculated) | 9.80 | 9.00 | 9.67 | 7.18 | 9.26 |
| Buybacks per share (calculated) | 2.87 | 3.91 | 4.17 | 5.26 | 1.12 |
| Stock pay per share (calculated) | 0.23 | 0.24 | 0.24 | 0.23 | 0.19 |
| Dividend per share | 7.17 | 6.78 | 6.23 | 5.66 | 5.25 |
Is McDonald’s dividend covered by its cash?
McDonald’s paid $5,115 million in dividends and spent $2,056 million buying back shares in 2025. Together, those distributions totalled $7,171 million, or 102.1% of real free cash flow. Distributions exceeded this measure from 2022 through 2025, with the peak mismatch at 151.6% in 2022. Dividends pay shareholders directly; buybacks reduce the number of shares dividing future earnings. Both leave less internally generated cash for modernization, acquisitions or debt repayment.
| Year to Dec 2025 | Year to Dec 2024 | Year to Dec 2023 | Year to Dec 2022 | Year to Dec 2021 | |
|---|---|---|---|---|---|
| Real free cash flow (after stock pay) (calculated) | 7,021 | 6,500 | 7,080 | 5,321 | 6,962.3 |
| Dividends paid | 5,115 | 4,870 | 4,533 | 4,168 | 3,918.6 |
| Shares bought back | 2,056 | 2,824 | 3,054 | 3,896 | 845.5 |
| Returned to shareholders, share of real free cash flow (calculated) | 102.1% | 118.4% | 107.2% | 151.6% | 68.4% |
What could change McDonald’s dividend?
Management expected slightly negative U.S. comparable sales for the third quarter of 2026. Sustained visit recovery supports the upside case. Chicken expansion must add profitable sales without slowing service or weakening operator returns. Through 2030, modernization must lift franchisee cash flow and McDonald’s returns, not just reported margins; weaker cash generation could constrain buybacks.
What is McDonald’s dividend yield today?
Revenue growth reached 3.7% in 2025 while operating margin was 46.1%; the high franchised mix can lift reported margins without proving stronger franchisee economics. EPS rose from $10.04 in 2021 to $11.95 in 2025 as the diluted share count fell. The company’s own free cash flow after stock-based pay was $9.80 per share against a $7.17 dividend. At $236.90, the shares trade at 19.2x trailing earnings and 17.2x forward earnings, with a 4.3% free-cash-flow yield and 3.3% dividend yield; net debt was $41,551 million.
The dividend yield is about 3.3%. In 2025, McDonald’s generated approximately $7,186 million of free cash flow and paid $5,115 million in dividends. Those payments consumed about 71% of free cash flow, leaving less room for buybacks or major modernization. The annualized dividend later rose to $7.72 per share, while franchisee support still competes for cash.
| Today (Oct 9, 2026) | |
|---|---|
| Share price | 236.90 |
| P/E, last 12 months (calculated) | 19.2x |
| Free cash flow yield (calculated) | 4.3% |
| Dividend yield (calculated) | 3.3% |