McDonald's share price ticks up as company dismisses real estate plan and lifts dividend

Chris Papadopoullos
Follow Chris
McDonald's is due to announce its turnaround strategy today (Source: Getty)

Mcdonald's shares edged up as the company announced a menu of items to satisfy investors.

The company said that REIT transactions – turning some of its vast real estate portfolio into a real estate trust – were not in the interest of shareholders.

Karen Short, an analyst at Deutsche Bank, believes the company's real estate is valued at between $40bn and $80bn.

McDonald's is also raising its dividend to $0.89 per share in December, a five per cent increase on the previous three-month period. McDonald's has raised its dividend each and every year since paying its first dividend in 1976.

McDonald's is planning to turn more of its restaurants into franchises, lifting the target figure from 3,500 more refranchises by 2018 to 4,000. It plans to increase the percentage of its restaurants that are operated by franchisees to 95 per cent.

The restaurant also wants to readjust focus on increasing the customer experience.

"For too long we've asked customers to adapt to us, now we're flipping the paradigm," said chief exec Steve Easterbrook.

McDonald's shares were up 0.28 per cent to $113.25 after being down on the day before the investor meeting. Trading was briefly suspended as it began.

Global sales rose four per cent in the three months to the end of September, the fast food giant revealed in its last set of results in October, with sales in the US increasing 0.9 per cent - the region's first sales increase in two years.

It's been a tough couple of years for Maccy D's, which has struggled not only with volatile currencies in some of its biggest markets, but also with an inconveniently-timed health kick among its customers.

Related articles