McDonald's vs. Restaurant Brands: What's the Better Dividend Stock to Buy Right Now?

Core Viewpoint - McDonald's and Restaurant Brands International are two prominent restaurant stocks for long-term investment, with McDonald's focusing on a single brand and Restaurant Brands managing multiple iconic names, including Tim Hortons and Burger King [1] Dividend Comparison - McDonald's has a strong history of dividend growth, increasing its dividend for 48 consecutive years, positioning it to become a Dividend King [3] - Restaurant Brands, formed in 2014, lacks the same historical track record but has also been growing its dividends [4] Payout Ratios - McDonald's has a lower payout ratio of under 60% of earnings, indicating more room for future dividend increases [5] - In contrast, Restaurant Brands has a higher payout ratio, which may raise concerns about its sustainability if not improved [6] Growth Prospects - Restaurant Brands may have better growth prospects due to its strategy of leveraging acquisitions to diversify operations, including the acquisition of Carrols Restaurant Group [7] - In 2024, Restaurant Brands reported comparable sales growth of 2.3%, while McDonald's experienced a decline of 0.1% [8] Investment Recommendation - For dividend-focused investors, McDonald's is recommended due to its proven track record, modest payout ratio, and strong brand, despite current sluggish sales [9] - Restaurant Brands is considered a cheaper stock with potential for long-term growth, trading at 21 times trailing earnings compared to nearly 27 for McDonald's [10]