The Smartest S&P 500 Dividend Stock to Buy With $1,000 Right Now

The Smartest S&P 500 Dividend Stock to Buy With $1,000 Right Now James Brumley, The Motley Fool Tue, June 30, 2026 at 8:54 PM GMT+2 3 min read ^GSPC MCD NVDA Need investment income? From a distance, it looks like income seekers are just out of luck right now. The S&P 500 's trailing dividend yield currently stands at a record low of just over 1%.

Dig deeper, though. The index's overall yield is only this low because a small handful of very large, non-dividend-paying tech companies' stocks now account for a massive share of the S&P 500's market value. There are still plenty of index stocks making solid, sizable dividend payments.

Fast-food restaurant chain McDonald's (NYSE: MCD) is one of them. Missed Nvidia in 2009? This Rare Signal Is Flashing Again.

 In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.  For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia.   Continue » Image source: Getty Images.

Not a permanent headwind In light of the stock's 20% price pullback from its late-February peak, most investors clearly don't agree with this call. But understandably so. The current economic backdrop (and inflation in particular) does not favor this company's product and price points.

As CEO Christopher Kempczinski commented on the global economy during May's Q1 earnings conference call, "It's certainly not improving, and it may be getting a little bit worse. " To this end, last quarter's same-store sales growth of 3. 8% was a relative disappointment, as lower-margin "value" items have become an increasingly important part of its menu.

Now look at the bigger picture. This is nothing McDonald's hasn't seen and survived before. Given the cyclical nature of economic headwinds, the restaurant chain is likely to come out of this one at least as strong as it was when it began, making the stock's slide since early March a great long-term buying opportunity.

Resilience worth owning It's still not a growth stock by any means. McDonald's remains a slow-and-steady value name. That's just the nature of the well-saturated fast-food restaurant business.

Even so, this ticker's recent weakness has made it an even more compelling income stock, boosting its forward-looking dividend yield to 2. 8%. And that's based on a dividend that's now been raised for 49 consecutive years, underscoring the durability of this company's business.

Should you buy stock in McDonald's right now? Before you buy stock in McDonald's, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the  10 best stocks for investors to buy now… and McDonald's wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Story Continues Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation,  you'd have $397,890 ! * Or when Nvidia made this list on April 15, 2005...

if you invested $1,000 at the time of our recommendation, you'd have $1,196,664 ! * Now, it's worth noting  Stock Advisor's total average return is 902% — a market-crushing outperformance compared to 207% for the S&P 500.  Don't miss the latest top 10 list, available with  Stock Advisor , and join an investing community built by individual investors for individual investors.

See the 10 stocks » *Stock Advisor returns as of June 30, 2026. James Brumley 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.

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