How Good Has MCD Stock Actually Been?

Core Viewpoint - McDonald's is experiencing a decline in traffic from lower-income consumers, which has persisted for nearly two years, raising concerns about its stock performance amidst these challenges [2]. Group 1: Stock Performance - Over the past five years, McDonald's stock has gained 46%, increasing to 63% when including reinvested dividends, despite not keeping pace with the technology-led S&P 500 [4]. - The stock has shown consistent progress, even during the bear market of 2022, often moving in opposition to the S&P 500, confirming its status as a defensive holding [6]. Group 2: Future Growth and Strategy - With 44,599 restaurants globally, expansion opportunities are diminishing, and future growth will primarily rely on higher prices and increased foot traffic, as indicated by a U.S. same-store sales growth of 2.4% last quarter [7]. - McDonald's is viewed more as an investment in rental real estate, with over 95% of its stores operated by franchisees who pay rising rents for the buildings owned by the company [9]. Group 3: Revenue and Dividends - The franchise model generates reliable revenue through rent payments, supporting a dividend that has been raised for 49 consecutive years, making it attractive for investors [10].