McDonald's Just Announced a Big Move That Could Unlock a Billion-Dollar Growth Opportunity for Its Business

McDonald's (NYSE:MCD) hasn't been doing too well this year. Its growth rate has been light, the stock has been in a tailspin, and investors aren't loving the stock, even for its high-yielding dividend, which currently pays 3.3%.

The company recently announced a big move, however, and it's one that could provide its financials with a big boost: it's getting into the ad business.

McDonald's to show ads on its drive-thrus

Hundreds of McDonald's locations have recently begun testing out ads on their drive-thru order boards. These are ads that are sold to third parties as a way to generate more revenue for McDonald's. The company estimates that if it goes through with ads on its drive-thru order boards, it could generate $1 billion in revenue. Over the past four quarters, McDonald's has brought in $27.7 billion in sales. The ad business would help diversify its operations and give it a new growth opportunity to pursue, without much additional cost; it would be an easy way to grow both its top and bottom lines.

In addition, the company recently announced plans to invest $8.5 billion over the next decade as it remodels restaurants, updates its menus, and retrains employees to improve the customer experience. McDonald's, despite being a top restaurant chain across the globe, has been struggling of late to grow its business. Its global comparable growth rate for the most recent quarter was just 1.3%.

Is McDonald's stock a good buy right now?

The sell-off in the fast food stock this year has not only sent it to a new 52-week low, but it also hasn't been trading this low since late 2022. In the process, its yield has climbed, enabling investors to collect a higher-than-normal payout from the stock. McDonald's also recently announced a dividend increase, representing the 50th consecutive year that it has done so.

McDonald's has a terrific track record for paying dividends and being a fairly safe and stable long-term investment. While it's been struggling recently, the business isn't broken; inflation may be more to blame for its sluggish growth than anything else these days, as consumers are a bit more cautious in their spending.

At just 19 times its trailing earnings, McDonald's stock has become a fairly cheap buy right now, especially given all the dividend income it can generate for investors. This is a stock that can be an excellent option for any type of investor to consider for the long haul.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.