McDonald's Stock Has Underperformed the S&P 500 in 5 of the Past 6 Years. Will 2025 Be Any Better?

Core Viewpoint - McDonald's has underperformed the market for several years, with a particularly tough year in 2024, raising questions about its future performance and investment viability [1][2]. Performance Comparison - Over the past six years, McDonald's has generated worse returns than the S&P 500 in five of those years, with the only exception being during the market crash in 2022 [3]. - The stock performance compared to the S&P 500 from 2019 to 2024 shows significant underperformance, with McDonald's stock returning -2.2% in 2024 while the S&P 500 returned 23.3% [3]. Sales and Growth Challenges - In the most recent quarter ending September 30, 2024, McDonald's global comparable sales decreased by 1.5%, with only a modest increase of 0.3% in the U.S. market [4]. - The company may face challenges in pushing higher costs onto customers, which could hinder growth and profitability [5]. Investment Considerations - Despite its underperformance, McDonald's may still be a suitable investment for those seeking dividend income and stability, as it offers a dividend yield of 2.4% [3][6]. - Over the past five years, McDonald's shares have risen by 47%, or 65% when including dividends, indicating some value for dividend-focused investors [7]. - The stock is currently trading at a high multiple of 26 times its trailing earnings, suggesting potential challenges in achieving growth [5].