McDonald’s Corp. (NYSE: MCD) is living up to its reputation as a dividend hiker yet again. On Thursday evening, McDonald’s announced that it will raise its quarterly dividend for its common shareholders by 15%, up to $1.16 per quarter.

The new $4.64 annualized dividend generates a yield of 2.88% based on its closing price of $160.79, but the shares rose handily on Friday morning based on new financial targets.

McDonald’s has raised its dividends for more than 40 consecutive years, keeping it in with the 25 companies with 40 years of dividend hikes.

McDonald’s did say in its release that the fast-food giant has experienced increased capital allocation flexibility, due to the evolution of its business model and also due to the effects of the Tax Cuts and Jobs Act of 2017.

When companies raise their dividends, it is frequently interpreted as strong conviction that the company can keep on delivering the same or better results years into the future. After all, no company wants to raise its dividend to the point that it has to cut that dividend in the years ahead if there are business cycle changes.

In living up to expectations, McDonald’s did issue some financial targets for 2019. The company sees systemwide sales growth of 3% to 5% and earnings growth per share in the high-single digits. The food giant also sees its operating margin in the mid-40% range, and it is targeting a return on incremental invested capital in the mid-20% range.

McDonald’s President and Chief Executive Officer Steve Easterbrook said:

Our substantial cash flow enables us to invest in the business to drive growth under our Velocity Growth Plan. We are confident that the Plan will deliver sustained, long-term profitability for our system and our shareholders, which is reflected in today’s increases in our dividend and three-year cash return to shareholders target.

And on why the dividend hikes for 40 years or more, the dividend history section of the McDonald’s investor relations site says:

McDonald’s has raised its dividend each and every year since paying its first dividend in 1976. Beginning in 1976 and through 2000, McDonald’s paid a quarterly dividend. From 2001 to 2007 the Company transitioned to offering annual dividends. Starting again in 2008, dividends are paid on a quarterly basis.

Shares of McDonald’s were reacting positively to the news on Friday. Its stock was up 2% at $164.18 shortly after Friday’s opening bell, versus a 52-week range of $146.84 to $178.70 and versus a consensus analyst target price from Thomson Reuters of $183.88.

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