Let’s put it this way, while the US stock market is on a super bullish ride, McDonald’s has struggled with a flat return for the past two years. In fact, it’s a blessing the stock pays dividends because otherwise it would have been better to put your money in a money market fund if you only look at the stock appreciation since September 2012!
What is Happening with Mickey D?
The optimist will tell you that:
MCD is the leader in the fast food industry,
It dominates with its incredible locations and their Real Estate is key in their business model,
It dominates the breakfast and drive-through business (where a big chunk of its profits originate),
A dividend yield over 3.4% is more than enough to be paid to wait.
The pessimist will tell you that:
Labor costs may increase as more protests arise
Margins are under pressure due to fierce competition
Health and Burgers don’t fit well together and the health wings are spreading right now
I’m sticking to MCD right now, what about you?
