McDonald's Raises Dividend Amid Franchise Growth Concerns

McDonald's Corporation reported continued earnings growth and raised its dividend as investors evaluated the company's franchise-driven business model, global sales performance, and recent stock decline. The company operates worldwide through a large franchise network that generates recurring royalty and rental income.

According to Yahoo Finance, McDonald's revenue increased 4% year over year to $7.10 billion in the second quarter of 2026, while global comparable sales grew 1.3%. Diluted earnings per share rose 6% to $3.32 during the same period.

The company said about 95% of its restaurants were operated by franchisees at the end of 2025. According to Yahoo Finance, this structure allows franchise operators to cover many operating costs while McDonald's collects royalties, rent, and fees.

McDonald's business model relies on brand recognition, purchasing scale, restaurant locations, digital ordering, loyalty programs, and value-focused promotions to maintain customer engagement, according to Yahoo Finance.

The company's dividend increased in September 2026, with the quarterly payment rising 4% from $1.86 to $1.93 per share. Yahoo Finance reported the increase marked McDonald's 50th consecutive year of dividend growth and gave the company Dividend King status.

With an annualized dividend of $7.72 per share and a share price near $233, Yahoo Finance calculated the dividend yield at about 3.3%. The figure is above the company's five-year average dividend yield of 2.24%.

Seeking Alpha reported that McDonald's shares had fallen about 30% from their February peak, creating one of the company's largest declines outside the COVID-19 period. The analysis linked recent weakness to inconsistent value execution and pricing differences among franchise operators.

The Seeking Alpha analysis said the company's franchise advantages remain intact while its NEXT plan prioritizes franchisee financial health and moderates unit growth to preserve returns.

According to Seeking Alpha, McDonald's current performance challenges are partly connected to customer traffic pressure among lower-income consumers and uncertainty around comparable sales growth. The company continues efforts to improve its US business performance.