McDonald’s (MCD) became a Dow Jones Industrial Average (DJIA) component on October 30, 1985. As The Washington Post reported, the move “planted [McDonald’s] golden arches in the heart of Wall Street” by adding it to the 30-stock index. McDonald’s replaced tobacco firm American Brands.
The 1985 addition of McDonald’s was among the very few Dow changes of the era, reflecting a shift toward consumer and service companies after decades of “smokestack” heavyweights. The entry of McDonald’s signaled the Dow’s adaptation to a service-oriented economy, while giving the fast food giant broader visibility among index investors.
Serving Up Returns Before and After Dow
McDonald’s stock was already on a tear when it joined the Dow Jones, and inclusion only boosted investor interest. Stock jumped about 89% when it joined the index. Back then its stock price was valued at roughly $3. Nowadays it is closer to $300.
In practice, MCD often moves steadily through economic ups and downs — modest declines during the 2001-2002 tech bear market — but it tends to rebound and compound over the long term. Total shareholder return has been driven by both price appreciation and dividends: over the past decade, McDonald’s has generally outperformed slower-growth peers in the consumer staples sector.
McDonald’s (MCD) Annual % Change Before Dow Inclusion and After. Source: Macrotrends
Drive-Thru Dividends: Consistent Payouts
A key pillar of McDonald’s investor appeal is its dividend track record. The company has paid dividends for 49 consecutive years through 2025. This consistency has made MCD a favorite for income-oriented portfolios.
As of this month, the company pays a quarterly dividend of $1.77 per share, or $7.08 annually, yielding around 2.4% at its current price, with the next quarterly dividend cash payout slated for September this year, according to Morningstar report. This adjustment reflects a raise in Q4 2024 from $1.67 to $1.77, maintaining the company’s commitment to shareholder returns.
In 2023 alone, McDonald’s returned over $8 billion to shareholders via dividends and buybacks, ranking it among the best dividend payers in the Dow Jones to date. Over multiple market cycles, McDonald’s combination of steady dividend growth and repurchases has helped produce strong long-term total returns, as illustrated in its 2023 10‑K and cumulative TSR charts.
Greening the Golden Arches
McDonald’s operates at least 44,000 restaurants in more than 100 countries. As of 2024, Statista reported 43,477 franchises, and it aims to increase this to 50,000 by 2027, with 2,200 new openings in this year alone. This expansion, particularly in International Development Licensed Markets, diversifies revenue and fuels growth, with analysts noting market share gains abroad.
McDonald’s has committed to net-zero greenhouse gas emissions by 2050, with interim science-based targets for 2030. It also aims to source 100% of guest packaging from renewable, recycled, or certified materials by this year. By the end of 2023, McDonald’s said it had achieved about 87% of that goal and was on track to meet the 2025 target, with ongoing efforts in energy efficiency and supply chain decarbonization. No updates to this figure have been reported as at the time of writing.
Through supply-chain innovation, restaurant energy efficiency, and circular packaging strategies, McDonald’s continues to use its global scale to advance sustainability.
McMoney in the Dow Jones
McDonald’s is trading at around $295-300 per share, giving it approximately 4% weight in the Dow (Slickcharts). That makes it the tenth-largest component — above names like Amazon, Nvidia, and IBM.
This price-weighting creates two implications. First, large price moves in McDonald’s shares can disproportionately sway the index. A 1% move in McDonald’s (about $3) translates to around 0.04% movement in the Dow. In contrast, a lower-priced stock like Verizon ($43) holds only about 0.6% weight, with far less impact. Second, as McDonald’s share price climbs, its influence in the index rises accordingly.
Since the Dow Jones includes only 30 stocks, higher-priced names like MCD have a greater effect than their market caps alone would suggest.
Not all Plain Sailing
Last month, McDonald’s reached a confidential settlement with Entertainment Studios Network and The Weather Group, resolving a $10 billion lawsuit that alleged racially discriminatory advertising practices against Black-owned media companies, per Morningstar.
Under the agreement, McDonald’s committed to continue purchasing ads from ESN at market rates, while not admitting wrongdoing. The outcome marks a step toward addressing long-standing diversity concerns while avoiding further legal exposure which may water down its influence in the Dow Jones.
At the same time, McDonald’s faces reputational challenges, but it also has high investor expectations. Institutional ownership of its stock climbed five percentage points from 70% in 2023 to about 75% today.
Big investors like Vanguard, BlackRock, State Street, and JP Morgan still back the company, showing they trust its long‑term prospects. Their 13F filings are an effort to make sure McDonald’s is seen as a stable high-value play in everything from ETFs (like DIA and SPY) to 401(k) retirement plans.
Institutional ownership of McDonald’s MCD. Source: Simply Wall St.
McDonald’s Future Outlook in the Dow
McDonald’s outlook remains positive, with revenue is expected to grow 7% annually, per Simply Wall St. This is driven by global expansion and digital ecosystem enhancements, such as loyalty programs and delivery growth, and initiatives such as the McValue platform and new menu items.
Despite challenges like consumer spending pullbacks, as noted in Q1 2025 earnings, McDonald’s resilience positions it well for continued success in the Dow Jones, maintaining its status as a core holding for stable growth and income.
As McDonald’s sets its sights on attracting Gen Z customers with new coffee and soda-based drinks tests at some 500 franchises later this year, its history of durable innovation, growth, and dependable income makes it a mainstay in diversified portfolios.
Put simply, if you want growth and income from a global powerhouse, McDonald’s remains the “value meal” to grab.
Author: Richardson Chinonyerem
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organizations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.
#3M #DowJones #Industrial #Innovation #Dividends
See Also:
3M in the Dow Jones: from Innovation to Tribulation | Disruption Banking
Why Coca-Cola Still Fizzes at the Top of the Dow | Disruption Banking
Johnson & Johnson: A Steady Dose of Dividends in the Dow Jones | Disruption Banking
