**Is McDonald’s a Buy?**
In the past 12 months, the world’s largest fast-food chain, McDonald’s (MCD), has been almost flat, despite the S&P 500 Index rising nearly 24%. This underperformance can be attributed to a combination of factors, including slowing comparable store sales and the E. coli outbreak in the U.S. in September-October 2024. However, this buying opportunity should not be missed by long-term investors.
**Comparative Growth by Market Segment**
| Market Segment | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
| — | — | — | — | — | — |
| U.S. | 8.1% | 4.3% | 2.5% | (0.7%) | 0.3% |
| International Business | 8.3% | 4.4% | 2.7% | (1.1%) | (2.1%) |
| International Development Licensing Market | 10.5% | 0.7% | (0.2%) | 1.3% | 3.5% |
| Global | 8.8% | 3.4% | 1.9% | 1% | 1.5% |
**FAQs:**
**Q: Is McDonald’s a solid investment opportunity?**
A: Yes, for long-term investors, McDonald’s is a solid investment opportunity.
**Q: What are the primary concerns impacting McDonald’s business?**
A: Inflation, two major hurricanes, and the E. coli outbreak in the U.S. and slowing consumer spending in the UK and Europe and ongoing conflict in the Middle East.
**Q: What are McDonald’s plans to counter near-term challenges?**
A: The company is introducing its popular chicken Big Mac in more regions, extending its $5 meal deal to attract more customers, and launching a mix-and-match McValue menu to offer a wider range of affordable options.
**Conclusion:**
McDonald’s is not immune to near-term headwinds, but its long-term outlook remains promising. The company’s efforts to counter these challenges, such as introducing new menu items and upgrading its digital platform, should lead to growth in the next few years. With a compound annual growth rate (CAGR) of 4% expected from 2023 to 2026, McDonald’s is a solid investment opportunity for long-term investors.**4 Reasons to Buy McDonald’s Stock Like There’s No Tomorrow**
As the largest fast-food chain in the world, McDonald’s (MCD) has a variety of advantages that make it an attractive investment opportunity for long-term investors. In this article, we’ll explore four reasons why you should consider buying McDonald’s stock like there’s no tomorrow.
**Advantages in the Franchise Model**
One of the primary advantages of McDonald’s is its franchise model. The majority of its restaurants are owned and operated by independent franchisees, which allows the company to focus on its role as a franchisor and brand owner. This model has several benefits, including:
* Reduced capital requirements: By using existing assets and infrastructure, McDonald’s doesn’t need to invest as much capital in new restaurants.
* Increased revenue: Franchisees pay royalties and fees to McDonald’s for the right to operate their restaurants, providing a steady stream of revenue.
* Improved scalability: With a large number of franchisees, McDonald’s can quickly expand its global presence without having to build out new restaurants itself.
**International Expansion**
McDonald’s is also expanding its presence in international markets, particularly in countries with growing middle-class populations. This provides a significant opportunity for growth, as consumers in these markets have increasing disposable income and a growing demand for Western-style fast food.
**Automation and Cost Savings**
To improve efficiency and reduce labor costs, McDonald’s is increasingly automating its restaurants. This can help to reduce costs and improve consistency in menu preparation and delivery. Additionally, the company is working to optimize its supply chain and logistics, which should help to reduce costs and improve profitability.
**Attractive Dividend Payout**
McDonald’s has a long history of paying dividends, with a forward dividend rate of 2.4%. The company has raised its dividend rate for 48 consecutive years, making it an attractive option for income-seeking investors. With two more dividend hikes, McDonald’s would become a Dividend King, an elite title reserved for companies that have raised their dividends at least 50 times in a row.
**What Does the Future Hold?**
Analysts expect McDonald’s earnings per share to grow steadily at a compound annual growth rate of 6% from 2023 to 2026, making it an attractive option for investors looking for long-term growth. The company’s strong brand recognition, international expansion, and automation efforts should continue to drive growth in the coming years.
**Frequently Asked Questions**
Q: What is the dividend yield for McDonald’s stock?
A: The forward dividend rate for McDonald’s is 2.4%.
Q: How have McDonald’s share buybacks impacted its share count?
A: Share buybacks have reduced the company’s share count by 25% over the past decade, which should drive earnings growth in the coming years.
Q: How has McDonald’s been able to maintain its dividend growth streak?
A: McDonald’s has raised its dividend rate for 48 consecutive years, making it an attractive option for income-seeking investors.
**Conclusion**
With its strong brand recognition, international expansion, automation efforts, and attractive dividend payout, McDonald’s is an attractive option for long-term investors. As the company continues to focus on improving efficiency, growing its international presence, and maintaining a strong dividend track record, it’s a good idea to buy McDonald’s stock like there’s no tomorrow.
