McDonald's turned negative Thursday after an executive mentioned the one thing investors in the Dow component don't want to see the new management fix: its dividend.
Shares traded 0.5 percent lower after CFO Kevin Ozan started talking about the fast food stock's dividend on the company's post-earnings conference call. They later extended losses before rebounding after the call ended. (Click here to get the latest quote.)
"As we execute the initial steps of our turnaround plan, we're actively evaluating our capital allocation decisions including our dividend as part of our broader strategic planning process. As a result, we're targeting our annual dividend announcement in November this year, a slight change in timing from our typical September update," he said on the call.
His comment got analysts' attention.
"Provide some direction in what way you're thinking about it, is it a positive or negative event because I think it's so important and critical to the investor base of your stock," Morgan Stanley analyst John Glass said in response.
Ozan demurred, saying the company needed to consider how the dividend fit into its broader strategic planning process, which is why it wanted to take the extra time.
In the financial arena, McDonald's plans increase the portion of its franchised restaurants and weigh its strategic planning, including how much capital it will be spending in the future.
The fifth-biggest dividend yielder in the Dow, McDonald's currently generates a 3.5 percent yield, making it an attractive stock for investors seeking to generate income.
Earlier on Thursday, the company exceeded Wall Street's earnings and revenue forecast but fell short of its global comparable sales forecast.