It’s been six months since I last wrote about McDonald's Corporation (NYSE: MCD ). During this time, the company has released its annual results. There are many interesting things to discuss about the fiscal yearQuality Growth Investor. I have the simplest of tastes, I only like the best. Here I will analyze the companies in my investment universe. I am looking for the best businesses in the world in order to create a long term portfolio that can outperform the market.Analyst’s Disclosure: I/we have no stoc ...

McDonald's (MCD) closed at $312.48 in the latest trading session, marking a -1.14% move from the prior day. This move lagged the S&P 500's daily loss of 0.17%. Meanwhile, the Dow experienced a drop of 0.39%, and the technology-dominated Nasdaq saw a decrease of 0.05%.Coming into today, shares of the world's biggest hamburger chain had gained 3.98% in the past month. In that same time, the Retail-Wholesale sector lost 2.42%, while the S&P 500 lost 3.94%.Analysts and investors alike will be keeping a close ey ...

Core Viewpoint - McDonald's Corporation (MCD) is experiencing a bullish trend, with stock performance outperforming industry peers and broader market indices, driven by strategic initiatives and global expansion efforts [1][5][20]. Group 1: Stock Performance - MCD's stock closed at $316.07, above its 50-day moving average of $305.19 and 200-day moving average of $288.64, indicating a bullish trend [1]. - Over the past three months, MCD shares have gained 13%, significantly outperforming the Zacks Retail - Restaurants industry's 0.6% rise and the S&P 500 index's 9.3% decline [5]. - MCD has outperformed competitors such as Restaurant Brands International (QSR), Wendy's (WEN), and Chipotle (CMG) during the same period [8]. Group 2: Global Expansion Strategy - McDonald's is focused on expanding its global presence, opening 2,116 restaurants in 2024, up from 2,067 in 2023, as part of its Accelerating the Arches strategy [10]. - The company plans to open 2,200 restaurants globally in 2025, contributing over 4% to new unit growth, and aims for a total of 50,000 restaurants by the end of 2027 [11]. Group 3: Menu Innovation and Customer Engagement - McDonald's is enhancing its core menu offerings and customer experience, launching the McValue platform in January 2025 to provide better value and options [12]. - The company is improving delivery services, with delivery sales mix doubling in Australia, Canada, and the U.S., and aims for 30% of system-wide delivery sales to come from its mobile app by 2027 [13]. Group 4: Loyalty Program and Digital Initiatives - Since launching its loyalty program, McDonald's has seen over 170 million 90-day active users, with sales to loyalty members reaching $30 billion in 2024 [15]. - The company aims to expand its active user base to 250 million and achieve $45 billion in annual sales by 2027, driven by digital adoption [15]. Group 5: Earnings Outlook - Analysts have increased the Zacks Consensus Estimate for McDonald's 2025 EPS from $12.23 to $12.25, indicating a 4.5% year-over-year increase, with further growth anticipated in 2026 [17]. - McDonald's is currently valued at a premium with a forward 12-month P/E ratio of 25.21X, slightly above the industry average of 25.12X, reflecting its strong market position and growth potential [18].

Core Viewpoint - McDonald's is currently facing investor reassessment due to mixed financial performance and pressures impacting sales, yet it remains a key stock with significant strengths and growth opportunities [2][3][18]. Financial Performance - For FY 2024, McDonald's consolidated revenues reached $25.9 billion, a 2% increase year-over-year, while global comparable sales saw a slight decline of 0.1% [6]. - The U.S. market experienced a 0.2% increase for the year but a 1.4% decline in Q4, primarily due to a decrease in average check amounts [4]. - International Operated Markets (IOM) decreased by 0.2% for the year, remaining flat in Q4, while International Developmental Licensed Markets (IDL) saw a 0.3% decline for the year but a 4.1% increase in Q4 [5]. - Full-year diluted earnings per share (EPS) was $11.39, a 1% decrease, while adjusted diluted EPS was $11.72, down 2% [6]. Digital Strategy - McDonald's has been building a strong digital ecosystem, with the MyMcDonald's Rewards program achieving over 175 million active users and a 15% increase in user engagement year-over-year [7]. - The loyalty program generated $30 billion in systemwide sales in 2024, a 30% increase from the previous year, with $8 billion in sales in Q4 alone [8]. Shareholder Returns - McDonald's has a dividend yield of 2.29%, with an annual dividend of $7.08 and a track record of 49 consecutive years of dividend increases [10]. - The company produced $6.67 billion in free cash flow in FY 2024, supporting dividends and share buybacks, with approximately $2.82 billion worth of stock repurchased [11]. Competitive Advantages - McDonald's brand is globally recognized, and its operational scale allows for increased efficiency and a dominant market presence [14]. - The company operates a heavily franchised model (around 95%), generating consistent high-margin royalty and rent income [15]. Growth Opportunities - Continued expansion and improvements in digital and loyalty platforms are expected to increase customer engagement and sales [16]. - Ongoing menu innovations and tactical value offerings aim to drive traffic and address affordability concerns among consumers [16]. Market Position - McDonald's currently trades at a trailing P/E ratio of around 26.7 and a forward P/E ratio near 24.8, indicating market expectations for continued earnings growth [12]. - Analysts generally rate the stock as a moderate buy, with an average 12-month price target of $322.87, suggesting modest upside potential from the current price [12].

Core Viewpoint - McDonald's Corporation (MCD) has shown strong stock performance, gaining 7.8% year-to-date, outperforming its industry peers and broader market indices [1][4]. Company Performance - Following a significant E. coli outbreak, McDonald's has regained consumer confidence by prioritizing food safety and removing the problematic supplier from its supply chain [3]. - The company has effectively implemented its "Accelerating the Arches" strategy, menu innovations, and value offerings, contributing to its positive performance [3][10]. - McDonald's has outperformed competitors like Restaurant Brands International (5.5% gain), Wendy's (7.9% decline), and Chipotle (15.5% decline) year-to-date [4]. Earnings Estimates - The 2025 earnings estimate for McDonald's has increased by 0.1% over the past 30 days, with a projected year-over-year growth of 4.5% [5]. - Current earnings estimates for 2025 are $12.25 per share, with a slight upward revision from previous estimates [6]. Growth Strategies - McDonald's aims to enhance guest counts by focusing on food quality, convenience, and value, with initiatives like the McValue platform launched in January 2025 [8][10]. - The company plans to open approximately 2,200 new restaurants globally in 2025, targeting a total of 50,000 by 2027, emphasizing global expansion as a key growth strategy [11]. - Increased focus on delivery services and digital engagement is expected to drive sales, with a goal of achieving 30% of system-wide delivery sales through its mobile app by 2027 [12]. Valuation - McDonald's stock is currently trading at a discount compared to industry peers based on a forward 12-month price-to-earnings (P/E) ratio, making it an attractive option for investors [13]. Analyst Sentiment - Analysts are optimistic about McDonald's, with 22 out of 37 recommendations rated as Strong Buy, leading to an Average Brokerage Recommendation (ABR) of 1.74 [17]. - The average price target for McDonald's stock is $331.1 per share, indicating a potential upside of 5.9% from current levels [17].

Group 1: Market Overview - U.S. stocks are currently experiencing volatility, with the S&P 500 down 3.6% year to date despite optimistic forecasts for 2025 [1] - High-performing tech stocks, particularly those involved in the AI sector, have faced significant struggles in the first quarter of the year [1] Group 2: Dividend Stocks as a Strategy - Dividend stocks can provide stability in uncertain market conditions, offering regular distributions to shareholders regardless of broader market performance [2] Group 3: PepsiCo (PEP) - PepsiCo offers a 3.7% dividend yield and trades at 17.5 times forward earnings, which is a discount compared to the S&P 500's 19.7 multiple [4] - The company has raised its dividend for 53 consecutive years, with a five-year dividend growth rate of 7.2%, surpassing the elite growth rate benchmark of 6% [5] - PepsiCo's diversified portfolio in beverages and snacks helps mitigate risks from changing consumer preferences and supports consistent dividend growth [6][7] - The company's global distribution network and strategic acquisitions enhance its competitive position and relevance in evolving markets [8] Group 4: McDonald's (MCD) - McDonald's is recognized as a major real estate company that operates a fast-food chain, justifying its premium valuation of 24.8 times forward earnings [9] - The company has a current yield of 2.3%, but its dividend growth rate has been 7.4% annually over the past five years, potentially doubling the yield on original investment within a decade [10] - McDonald's unique business model, owning approximately 70% of its restaurant locations, provides a stable income stream through rent paid by franchisees, contributing to a moderate payout ratio of 59.5% [11][12] - The brand's global expansion and technology investments position it well for future growth while maintaining dividend security [13]

Core Concept - McDonald's is launching a limited-time collaboration with the upcoming film "A Minecraft Movie," featuring special meals and collectibles that enhance the gaming experience for fans [1][2][8]. Product Offerings - The "A Minecraft Movie Meal" includes a choice of a Big Mac or 10-piece Chicken McNuggets, medium fries, a drink, and a limited-edition collectible [4][6]. - The "A Minecraft Movie Happy Meal" features one of 12 film-inspired figurines or Block World toys, along with a scannable code for an exclusive digital game [5][6]. Digital and In-Game Experiences - Each "A Minecraft Movie Meal" comes with one of six collectibles inspired by McDonald's characters and menu items, which can unlock exclusive skins in the Minecraft Marketplace [6][7]. - Purchasing through the McDonald's App provides a one-time redeemable code for the McDonald's Add-On pack in Minecraft, enhancing gameplay with additional characters and tools [7]. Marketing Strategy - The campaign aims to create an immersive experience that resonates with both McDonald's and Minecraft fan bases, leveraging existing fan creativity within the game [8]. - The promotion is set to begin on April 1, 2025, coinciding with the film's release on April 4, 2025 [2][10]. Company Background - McDonald's operates over 40,000 locations in more than 100 countries, with approximately 95% of its restaurants owned by independent local business owners [9].

Core Viewpoint - McDonald's and Restaurant Brands International are two prominent restaurant stocks for long-term investment, with McDonald's focusing on a single brand and Restaurant Brands managing multiple iconic names, including Tim Hortons and Burger King [1] Dividend Comparison - McDonald's has a strong history of dividend growth, increasing its dividend for 48 consecutive years, positioning it to become a Dividend King [3] - Restaurant Brands, formed in 2014, lacks the same historical track record but has also been growing its dividends [4] Payout Ratios - McDonald's has a lower payout ratio of under 60% of earnings, indicating more room for future dividend increases [5] - In contrast, Restaurant Brands has a higher payout ratio, which may raise concerns about its sustainability if not improved [6] Growth Prospects - Restaurant Brands may have better growth prospects due to its strategy of leveraging acquisitions to diversify operations, including the acquisition of Carrols Restaurant Group [7] - In 2024, Restaurant Brands reported comparable sales growth of 2.3%, while McDonald's experienced a decline of 0.1% [8] Investment Recommendation - For dividend-focused investors, McDonald's is recommended due to its proven track record, modest payout ratio, and strong brand, despite current sluggish sales [9] - Restaurant Brands is considered a cheaper stock with potential for long-term growth, trading at 21 times trailing earnings compared to nearly 27 for McDonald's [10]

Group 1: Stock Performance - McDonald's closed at $306.92, reflecting a +1.09% change from the previous day, outperforming the S&P 500's gain of 1.08% [1] - Over the past month, McDonald's shares have decreased by 0.4%, which is better than the Retail-Wholesale sector's decline of 11.45% and the S&P 500's drop of 8.26% [1] Group 2: Upcoming Earnings - Analysts expect McDonald's to report earnings of $2.68 per share, indicating a year-over-year decline of 0.74% [2] - The consensus estimate for revenue is $6.13 billion, down 0.55% from the same quarter last year [2] Group 3: Full Year Projections - For the full year, earnings are projected at $12.23 per share and revenue at $26.37 billion, representing increases of +4.35% and +1.74% respectively from the prior year [3] Group 4: Analyst Projections - Recent shifts in analyst projections for McDonald's are important as they reflect short-term business trends, with positive revisions indicating a favorable business outlook [4] Group 5: Zacks Rank and Performance - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), shows McDonald's currently holds a rank of 3 (Hold) [6] - Over the past month, the Zacks Consensus EPS estimate for McDonald's has decreased by 0.23% [6] Group 6: Valuation Metrics - McDonald's has a Forward P/E ratio of 24.83, which is higher than the industry average of 23.14 [7] - The PEG ratio for McDonald's is 3.11, compared to the Retail - Restaurants industry's average PEG ratio of 2.08 [7] Group 7: Industry Ranking - The Retail - Restaurants industry, which includes McDonald's, has a Zacks Industry Rank of 142, placing it in the bottom 44% of over 250 industries [8]

Core Insights - The article discusses the investment potential of McDonald's (MCD) shares, highlighting a beneficial long position held by the analyst [1]. Group 1 - The analyst expresses a personal opinion on McDonald's stock performance, indicating a positive outlook based on current market conditions [1]. - The article emphasizes that past performance does not guarantee future results, suggesting a cautious approach to investment decisions [2].