McDonald's Hands Back $81 Billion

Core Insights - McDonald's (MCD) has returned a substantial $81 billion to shareholders over the past decade through dividends and share buybacks, ranking as the 25th highest contributor to shareholders in history [3] - The company's disciplined capital management and global expansion strategy have allowed it to maintain strong shareholder returns, reflecting management's confidence in financial stability and sustainable cash flow generation [3][6] Shareholder Returns - McDonald's has consistently provided direct returns to shareholders, which are indicative of its financial health and management's confidence [3] - The total capital returned to shareholders as a percentage of current market cap appears inversely proportional to growth potential for reinvestments, with companies like Meta and Microsoft showing quicker growth but lower capital returns [5] Financial Performance - McDonald's has demonstrated revenue growth of 1.2% over the last twelve months and an average of 3.4% over the last three years [11] - The company boasts a free cash flow margin of nearly 26.5% and an operating margin of 46.1% for the last twelve months [11] - The stock trades at a P/E multiple of 25.5, indicating its valuation in the market [11] Historical Performance and Risks - McDonald's has faced significant declines in the past, including a 47% drop during the Dot-Com crash and a 36% decline during the Covid pandemic, highlighting that no stock is entirely safe [8] - The company has also experienced pullbacks of approximately 16-17% during smaller disruptions, such as the 2018 correction and recent inflation concerns [8]