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McDonald’s stock jumps after upbeat sales report, raised dividend

McDonald’s stock jumps after upbeat sales report, raised dividend

Published: Oct. 8, 2020 at 8:15 a.m. ETBy 

Tomi Kilgore

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Shares of McDonald’s Corp. rallied 1.6% in premarket trading Thursday, after the fast-food giant reported third-quarter same-store sales that were better than expected and said it was raising its dividend by 3%.

The company MCD, -0.28% said same-store sales for the quarter ended Sept. 30 fell 2.2% from a year ago, but that beat the FactSet consensus of a 5.0% decline. U.S. same-store sales grew 4.6%, more than the FactSet consensus of 2.5% growth.

The company said U.S. sales were positive throughout the quarter, boosted by “strong” average check growth from larger group orders.

Separately, the company said it was raising its quarterly dividend to $1.29 a share from $1.25. The new dividend will be payable Dec. 15 to shareholders of record on Dec. 1. Based on Wednesday’s stock closing price of $226.48, the new annual dividend rate implies a dividend yield of 2.28%, compared with the implied yield for the S&P 500 SPX, 0.65% of 1.66%, according to FactSet.

” While current year business results have been impacted by the COVID-19 pandemic, the pace of recovery paired with the Company’s strong financial position support this increase to the dividend while still giving the company the ability to invest in the business ,” McDonald’s said in a statement.

McDonald’s stock has rallied 14.6% year to date through Wednesday, while the Dow Jones Industrial Average DJIA, 0.38% has slipped 0.8%.

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