Not many stocks can offer growth, value, and income, but that's exactly what McDonald's Corporation (NYSE: MCD) did in recent years. Since CEO Steve Easterbrook took over the company in March 2015, the stock has jumped 62%, slightly outperforming S & P 500 by 26.4% over that period. Under the leadership of Easterbrook, McDonald's has improved its services by offering full-time breakfast, refinancing international locations, and improving the sourcing and quality of food by banning antibiotics from chickens and using only eggs from cage-free chickens his Quarter Pounders. As a result, McDonalds has posted superior comparable sales and earnings growth at a time when a large portion of the restaurant industry has been struggling. However, past performance is no guarantee of future returns, as the term implies. Is McDonald's a purchase today? Let's take a closer look at what the Golden Arches offer investors.
. Growth Prospects
Despite McDonald's strong quarterly report at the end of January, equities fell 7.5%. Comparable sales increased 5.5% globally in the quarter as traffic increased in all segments. Restaurants can increase their sales in two ways: through comparable sales or by adding new stores. However, comparable sales are much more effective as they avoid the cost of building and opening new restaurants. As a mature company with more than 35,000 restaurants, McDonald's will only be able to achieve modest growth by opening new restaurants, although it will open 1,000 new locations by 2018, making comparable sales the best option for the company to achieve growth.
Since most McDonald's restaurants are franchised, the company is somewhat isolated from fluctuations in revenue growth, but as long as this index increases, profits should follow. This will depend on the company further improving its menu and experience with deliveries and new and improved offerings, but Easterbrook appears to be thriving by providing McDonald's customers with a revised dollar menu and all-day breakfast and catering Serves those who are willing to pay for better quality foods like fresh beef.
Meanwhile, the company's refraining plan has helped cut costs and improve profitability.
. 2 Review
The graph below shows McDonalds' price-earnings ratio against some of its competitors.
|Restaurant Brands International||21.9  Yum! Trademarks||22.3|
As you can see, McDonald's is slightly more expensive than any of his traditional fast food counterparts, but cheaper than Starbucks. As a global brand with more than 35,000 locations, McDonald's does not have a perfect partner, but given its recent growth as the company has outperformed all other competitors on a comparable revenue basis, this rating is attractive. McDonald's, which also offers a tempting dividend yield of 2.6%, is a dividend Aristocrat – after increasing its quarterly payout every year for more than 25 years – an indication of the strength of its business model and the obligation to repay capital to the shareholders. Analysts expect earnings per share to rise 14% this year, a strong growth rate.
. 3 Competitive landscape
The restaurant business is changing rapidly. The rise of the fast-casual sector has forced traditional incumbents to improve their food quality, and the growing popularity of e-commerce has increased the supply of more customers to services such as GrubHub and About Eats.
Once McDonald's appeared behind the so-called Better-Burger competition, but the fast-food giant has outperformed them in recent quarters with innovation and the brand promise of convenience. Value and delicious food. With segments such as McCafe, all-day breakfast and delivery, McDonald's appears well positioned to adapt to the changing dynamics in the restaurant industry.
With solid growth prospects, fair valuation, smart management and a rock-solid brand, McDonald's looks like a buy in the market today. As long as the company can achieve solid comparable sales growth, the stock should move higher.