If I Invest $1,000 in McDonald's Stock Now, What Will It Be Worth in 5 Years?
What if you were told that the secret to a six-figure portfolio isn't some obscure crypto coin, but the place where you buy your morning coffee? Right now, $1,000 can buy you roughly 172 Big Macs, assuming they're $5.79 where you live, or it can buy you a piece of the most resilient fast food empire on the planet.
McDonald's (MCD) currently trades at about $310 with a dividend streak that has lasted nearly half a century. Here's how much your $1,000 could be worth in McDonald's stock in five years.
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What $1,000 Could Have Grown to If Invested 5 Years Ago
Right now, a single share of McDonald's stock costs about $310. Your $1,000 gets you about 3.2 shares. That's not going to buy you a private island in five years, but because of its growth and dividend payouts, that $1,000 works harder than you might think.
When you factor in price appreciation and those quarterly dividend checks being reinvested into more fractional shares, the growth curve starts to bend upward.
We can calculate recent MCD returns by using the standard formula for compound growth (future value = 1,000 x (1 + r)^5) and looking at the last five years of performance, where we can see that MCD delivered an average annual return of 10.39%.
So, let's plug that into the equation:
$1,000 x (1 + 0.1039)^5 = $1,639.26
If you invested $1,000 in McDonald's stock five years ago, you'd now have $1,639, give or take.
A $639 gain is a 64% increase on your initial investment, which is significantly more than the usual 0.01% interest you'd be getting with it sitting in your bank.
What $1,000 Could Become in 5 Years
The stock market never moves in a perfectly straight line. It's almost expected that most companies at this level will experience moments of slow growth and record-breaking highs. Depending on how the next five years shake out, your $1,000 will likely land in one of these three buckets:
Slow growth, which can happen when the stock market underperforms
Historical growth, based on McDonald's last five-year performance
And, as a bonus, what long-term growth would look like, assuming we followed McDonald's 10-year average return
$1,000 in five years | Total gain | |
6% (slower growth) | $1,338.23 | $338.23 |
10.39% (recent five-year MCD total return) | $1,639.26 | $639.26 |
12.95% (closer to 10-year MCD total return) | $1,838.36 | $838.36 |
It's not unreasonable to assume that your $1,000 can turn into $1,639 by 2031.
Dividends Matter More Than People Think
McDonald's has been a long-running dividend payer, and recently its TTM dividend is about $7.44 per share (2.43% yield at current prices).
With roughly 3.27 shares, that's about $24 per year in starting annual dividends.
If you don't reinvest dividends, your ending value likely will be lower than the "total return" math above, though you will receive cash along the way.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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