Added McDonald’s to Dividend Geek Portfolio
“Where did you go for lunch?” This was the question I asked a co-worker years ago who happened to be of Middle-Eastern descent. “I went to Grandpa’s house” was his reply. As he turned in his desk chair I could then see a McDonald’s bag and a Big Mac. “Grandpa’s house?” I said in a puzzled voice. “Yes” was his reply. “The food is soooooooo good it reminds me of eating at Grandpa’s house, so McDonald’s is my Grandpa’s house.” I love it I said. “Hey next time you go to Grandpa’s house let me know and I’ll join you.”
I take my kids to Grandpa’s house now too. Such is the power of great tasting food and a world-wide powerhouse franchise. Not only are we geeks over Grandpa’s food, but we love his dividend history even more!
We purchased 12 shares (aprox. $1,000) of McDonald’s (MCD) today at $87.30 per share for the dividend geek portfolio. We are in the process of building our diversified portfolio (one stock from each of the ten industry sectors). This initial purchase of MCD fills our need for a stock in the Consumer Discretionary sector.
MCD is down 2% today (8-8-12) on the earnings report news that their July sales were flat. At the current $87 per share price MCD is trading at a 15% discount to fair value. Not quite the 20% margin that we prefer but 15% is pretty good for the strength of a company like McDonald’s. The current annual dividend yield is 3.24% close enough to our preferred 3.5% range. MCD’s next dividend record date will be somewhere around September 4 to pay out a $.70 per share quarterly dividend in mid September.
McDonald’s has raised its dividend for 35 consecutive years in fact it has increased its dividend each and every year since paying its first dividend in 1976. The most recent increase was Dec 2011 when they upped the quarterly dividend from $0.61 to $0.70 which was a 14.75% annual increase!
With this new purchase the Dividend Geek portfolio passive income went from $105.58 to $139.18 a year.
Filed in: Dividend Geek Portfolio
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