McDonald’s & Amex: 2 Steady Dividend Stocks for Long-Term Growth

McDonald’s (NYSE:MCD) represents one of the most reliable long-term holdings in the current market environment, despite recent stock price volatility. The company has faced challenges from inflationary pressures that increased costs across labor, ingredients, and other operational expenses. However, McDonald’s has effectively responded with strategic initiatives that position it for sustained growth. The fast-food giant’s recent focus on its value menu has been particularly successful in winning back customer loyalty and driving traffic.

The value proposition enhancement comes at a crucial time, with Citi analyst Jon Tower setting a $381 price target for MCD stock, partly based on the success of this value menu strategy. Combined with ongoing menu innovations, these developments create significant potential for McDonald’s to exceed expectations in upcoming quarters. The key question for investors is whether the company can successfully capture market share from competitors, a prospect that appears increasingly likely given current strategic execution.

From a valuation perspective, McDonald’s trades at 22.6 times forward price-to-earnings, offering investors a compelling package that includes a low beta of 0.50 and a solid 2.36% dividend yield. The stock’s recent 6% decline appears unwarranted given the company’s strong fundamentals and growth prospects. With quarterly dividends of $1.77 per share and potential for future dividend increases, MCD presents an attractive opportunity for income-focused investors seeking stability and growth.

American Express (NYSE:AXP) continues to demonstrate why it remains a premier blue-chip dividend stock, despite its current yield sitting below 1% at 0.99%. The company’s strategic focus on premium offerings and demographic expansion provides strong catalysts for future earnings growth and potential dividend increases. American Express has shown remarkable success in attracting younger cardholders, particularly Millennials and Gen Z, positioning the company for long-term relevance and growth.

The recent $200 price increase for the premier Platinum card exemplifies American Express’s premium positioning strategy. The enhanced card offers approximately $3,500 in value for subscribers who fully utilize the available perks, representing significant value for the $900 annual fee. This strategic pricing move strengthens the company’s brand positioning while potentially driving higher revenue per cardholder. The successful implementation of such premium strategies underscores American Express’s ability to maintain its competitive edge in the credit card industry.

Trading at 18.7 times forward P/E, American Express appears undervalued given its strong thematic tailwinds and growth drivers. The stock has delivered impressive 128% returns over the past two years, yet recent consumer jitters have driven a 3% price decline that seems overdone relative to the company’s fundamental strength. With quarterly dividends of 82 cents per share and strong potential for above-average dividend hikes in coming years, AXP represents a compelling opportunity for investors seeking dividend growth alongside capital appreciation.

Both McDonald’s and American Express exemplify the characteristics that make for successful long-term dividend investments, particularly in the current market environment characterized by volatility and valuation concerns. Their defensive qualities, combined with specific growth catalysts, create a compelling case for inclusion in diversified portfolios. The recent price dips in both stocks present potential entry points for investors seeking to establish or add to positions in these quality companies.

The seven-year investment journey highlighted in the analysis demonstrates the power of holding quality dividend stocks through market cycles. Despite periods of significant market turbulence, including the COVID-19 crash in 2020, the 2022 bear market, and recent tariff chaos in April 2025, both companies have maintained their dividend-paying capabilities while positioning for future growth. This resilience underscores the importance of focusing on fundamental business strength rather than short-term market fluctuations.

For investors seeking a balanced approach to dividend investing, McDonald’s offers immediate income with its 2.36% yield, while American Express provides stronger dividend growth potential despite its lower current yield. Both companies trade at reasonable valuations relative to their growth prospects and maintain strong competitive positions in their respective industries. As the market continues to navigate uncertainty, these defensive powerhouses offer investors the combination of income generation and capital appreciation potential that can help weather market volatility while building long-term wealth.