I like McDonald’s (MCD) as a defensive dividend stock. The company consistently increased its dividends annually over the past four decades. The stock price also increased steadily over the years as the company grew. While the COVID-19 pandemic brought challenges for McDonald’s, the company held up well and is on track for strong growth in 2021.
McDonald’s has been holding up well during the pandemic. The company’s Q3 results demonstrate MCD’s resilience during this time. The company exceeded revenue estimates by $52.7 million and EPS estimates by $0.32. Earnings per share increased by 4% in Q3 to $2.22. Global comp-store sales declined by 2.2% in Q3. However, U.S. comp-store sales increased by 4.6%.
The company attributes the ‘3 D’s’ to the comp-store sales success that McDonald’s achieved during the pandemic: digital, delivery, and drive-thru. The digital channels include the McDonald’s app and ordering kiosks. The company bought Dynamic Yield in 2019 to offer personalized drive-thru ordering experiences. Dynamic Yield can create drive-thru menus based on trending menu items, the weather, current restaurant traffic, and menu recommendations that complement what was already ordered. This technology can also be incorporated into the company’s app and other ordering kiosks.
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