The Dynamic Dividend

McDonald’s: Sales Miss Creates 3% Yield Opportunity

McDonald’s (MCD) delivered its 100th consecutive month of global sales growth this morning, but the August figures came in below Wall Street’s expectations, sending shares much lower in early trading.

McDonald’s reported global sales growth at comparable locations of 3.5%, including a 3.9% domestic rise and 2.7% gain in Europe. Sales were down 0.3% in the company’s APMEA (Asia/Pacific, Middle East and Africa) segment. The average analyst expected bigger growth globally (5%) as well as in the U.S. (4.5%), Europe (6%), and APMEA (3.7%).

Shares of MCD have sunk as low as $84.63 (-4.49%) today, where they feature a 2.88% dividend yield. Even with today’s fall, the stock is up more than 10% in 2011, far outpacing the broader market.

Income investors hoping for the fast food giant’s stock to fall a little further so they can lock in a 3% yield shouldn’t wait to pull the trigger. Buyers at today’s price will almost certainly be sitting on a yield-on-cost of at least 3% when McDonald’s hikes its dividend later this month. The fast food giant has raised its payout every year since 1977, and traditionally does so each September.