Is McDonalds Stock a Good Investment?
McDonalds Investment Advice | MCD |
- Examine McDonalds' financial health by looking at its balance sheet, income statement, and cash flow statement. Analyze key financial ratios, such as Price-to-Earnings (P/E), Price-to-Sales (P/S), and Price-to-Book (P/B), to determine whether the stock is fairly valued or over/undervalued.
- Research McDonalds' leadership team and their track record. Good management can help McDonalds navigate difficult times and make strategic decisions that benefit shareholders and increases its net worth.
- Consider the overall health of the Hotels, Restaurants & Leisure space and any emerging trends that could impact McDonalds' business and its evolving consumer preferences.
- Compare McDonalds' performance and market position to its competitors. Analyze how McDonalds is positioned in terms of product offerings, innovation, and market share.
- Check if McDonalds pays a dividend and its dividend yield and payout ratio.
- Review what financial analysts are saying about McDonalds' stock and their price targets. However, remember that analysts' opinions can vary, and their predictions may not always be accurate.
It's important to note that investing in McDonalds stock, carries risks, and you should carefully consider your investment goals and risk tolerance before making any investment decisions. Also, remember that it's important for investors to have a long-term perspective and a well-diversified portfolio to manage the impact of stock market volatility on their investments. Below is a detailed guide on how to decide if McDonalds is a good investment.
Sell | Buy |
Cautious Hold
Market Performance | Weak | Details | |
Volatility | Very steady | Details | |
Hype Condition | Low key | Details | |
Current Valuation | Fairly Valued | Details | |
Odds Of Distress | Very Low | Details | |
Economic Sensitivity | Slowly supersedes the market | Details | |
Investor Sentiment | Impartial | Details | |
Analyst Consensus | Buy | Details | |
Financial Strenth (F Score) | Healthy | Details | |
Financial Leverage | Not Rated | Details | |
Reporting Quality (M-Score) | Possible Manipulator | Details |
Examine McDonalds Stock
Researching McDonalds' stock involves analyzing various aspects of the company and its industry to make an informed investment decision. The key areas to focus on are fundamentals, business model and competitive advantage. It is also important to analyze trends in revenue, net income, and cash flow, as well as key financial ratios, such as price-to-earnings (P/E), price-to-sales (P/S), and debt-to-equity (D/E). About 73.0% of the company shares are owned by institutional investors. The company has Price/Earnings To Growth (PEG) ratio of 2.67. McDonalds recorded earning per share (EPS) of 11.42. The entity last dividend was issued on the 2nd of December 2024. The firm had 2:1 split on the 8th of March 1999.
To determine if McDonalds is a good investment, evaluating the company's potential for future growth is also very important. This may include expanding into new markets, launching new products or services, or improving operational efficiency. Companies with strong growth prospects can be more attractive investments. This aspect of the research should be conducted in the context of the overall market and industry in which the company operates and should include an analysis of growth potential, competitive landscape, and any regulatory or economic factors that could impact the business. Some of the essential points regarding McDonalds' research are outlined below:
About 73.0% of the company shares are owned by institutional investors | |
Latest headline from smh.com.au: Disposition of 1054 shares by Tiffanie Boyd of McDonalds subject to Rule 16b-3 |
McDonalds Quarterly Liabilities And Stockholders Equity |
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McDonalds uses earnings reports to provide investors with an update of all three financial statements, including the income statement, the balance sheet, and the cash flow statement. Therefore, it is also crucial when considering investing in McDonalds. Every quarterly earnings report provides investors with an overview of sales, expenses, and net income for the most recent period. It also may provide a comparison to McDonalds' previous reporting period. The quarterly earnings reports are usually disseminated to the public via Form 10-Q, which is a legal document filed with the Securities and Exchange Commission every quarter.
23rd of April 2024 Upcoming Quarterly Report | View | |
25th of July 2024 Next Financial Report | View | |
31st of March 2024 Next Fiscal Quarter End | View | |
3rd of February 2025 Next Fiscal Year End | View | |
31st of December 2023 Last Quarter Report | View | |
31st of December 2023 Last Financial Announcement | View |
Earnings surprises can significantly impact McDonalds' stock price both in the short term and over time. Negative earnings surprises usually result in a price decline. However, it has been seen that positive earnings surprises lead to an immediate rise in a stock's price and a gradual increase over time. This is why we often hear news about some companies beating earning projections. Financial analysts spend a large amount of time predicting earnings per share (EPS) along with other important future indicators. Many analysts use forecasting models, management guidance, and additional fundamental information to derive an EPS estimate. Below are the table of largest EPS Surprises McDonalds' investors have experienced.
Reported | Fiscal Date | Estimated EPS | Reported EPS | Surprise | |||
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2020-07-28 | 2020-06-30 | 0.74 | 0.66 | -0.08 | 10 | ||
2008-04-22 | 2008-03-31 | 0.7 | 0.81 | 0.11 | 15 | ||
2015-10-22 | 2015-09-30 | 1.27 | 1.4 | 0.13 | 10 | ||
2005-04-21 | 2005-03-31 | 0.43 | 0.56 | 0.13 | 30 | ||
2017-04-25 | 2017-03-31 | 1.33 | 1.47 | 0.14 | 10 | ||
2021-07-28 | 2021-06-30 | 2.11 | 2.37 | 0.26 | 12 | ||
2023-04-25 | 2023-03-31 | 2.33 | 2.63 | 0.3 | 12 | ||
2021-10-27 | 2021-09-30 | 2.46 | 2.76 | 0.3 | 12 |
Know McDonalds' Top Institutional Investors
Have you ever been surprised when a price of an equity instrument such as McDonalds is soaring high without any particular reason? This is usually happening because many institutional investors are aggressively trading McDonalds backward and forwards among themselves. McDonalds' institutional investor refers to the entity that pools money to purchase McDonalds' securities or originate loans. Institutional investors include commercial and private banks, credit unions, insurance companies, pension funds, hedge funds, endowments, and mutual funds. Operating companies that invest excess capital in these types of assets may also be included in the term and may influence corporate governance by exercising voting rights in their investments.
Shares | T. Rowe Price Associates, Inc. | 2024-09-30 | 8.1 M | Northern Trust Corp | 2024-09-30 | 8 M | Royal Bank Of Canada | 2024-09-30 | 7.2 M | Legal & General Group Plc | 2024-09-30 | 5.9 M | Bank Of New York Mellon Corp | 2024-09-30 | 5.8 M | Ubs Group Ag | 2024-09-30 | 5.7 M | Charles Schwab Investment Management Inc | 2024-09-30 | 5.6 M | Capital World Investors | 2024-09-30 | 4.7 M | Ubs Asset Mgmt Americas Inc | 2024-09-30 | 4.5 M | Vanguard Group Inc | 2024-09-30 | 69.6 M | Blackrock Inc | 2024-06-30 | 50.2 M |
McDonalds' market capitalization trends
The company currently falls under 'Mega-Cap' category with a total capitalization of 212.57 B.Market Cap |
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McDonalds' profitablity analysis
Last Reported | Projected for Next Year | ||
Return On Tangible Assets | 0.16 | 0.09 | |
Return On Capital Employed | 0.24 | 0.15 | |
Return On Assets | 0.15 | 0.09 | |
Return On Equity | (1.80) | (1.71) |
Determining McDonalds' profitability involves analyzing its financial statements and using various financial metrics to determine if McDonalds is a good buy. For example, gross profit margin measures McDonalds' profitability after accounting for the cost of goods sold, while net profit margin measures profitability after accounting for all expenses. Other important metrics include return on assets, return on equity, and free cash flow. By reviewing multiple sources and metrics, you can gain a complete picture of McDonalds' profitability and make more informed investment decisions.
McDonalds' Earnings Breakdown by Geography
Please note, the presentation of McDonalds' financial position, as portrayed in its financial statements, is often influenced by management's estimates, judgments, and sometimes even manipulations. In the best case, McDonalds' management is honest, while the outside auditors are strict and uncompromising. Please utilize our Beneish M Score to check the likelihood of McDonalds' management manipulating its earnings.
Evaluate McDonalds' management efficiency
McDonalds has Return on Asset of 0.1363 % which means that on every $100 spent on assets, it made $0.1363 of profit. This is way below average. McDonalds' management efficiency ratios could be used to measure how well McDonalds manages its routine affairs as well as how well it operates its assets and liabilities. As of December 13, 2024, Return On Tangible Assets is expected to decline to 0.09. In addition to that, Return On Capital Employed is expected to decline to 0.15. At present, McDonalds' Total Current Assets are projected to increase significantly based on the last few years of reporting. The current year's Other Assets is expected to grow to about 10.5 B, whereas Non Current Assets Total are forecasted to decline to about 25.5 B.Last Reported | Projected for Next Year | ||
Book Value Per Share | (6.47) | (6.14) | |
Tangible Book Value Per Share | (10.64) | (10.11) | |
Enterprise Value Over EBITDA | 19.01 | 9.77 | |
Price Book Value Ratio | (45.86) | (43.56) | |
Enterprise Value Multiple | 19.01 | 9.77 | |
Price Fair Value | (45.86) | (43.56) | |
Enterprise Value | 216.2 B | 227 B |
McDonalds showcases strong leadership that adapts to market changes and drives innovation. Our analysis explores how this adaptability affects the stock's investment appeal.
Dividend Yield 0.0239 | Forward Dividend Yield 0.0239 | Forward Dividend Rate 7.08 | Beta 0.735 |
Basic technical analysis of McDonalds Stock
As of the 13th of December 2024, McDonalds secures the risk adjusted performance of 0.0352, and Mean Deviation of 0.7504. Concerning fundamental indicators, the technical analysis model lets you check available technical drivers of McDonalds, as well as the relationship between them. Please verify McDonalds coefficient of variation, maximum drawdown, skewness, as well as the relationship between the information ratio and downside variance to decide if McDonalds is priced favorably, providing market reflects its recent price of 297.09 per share. Given that McDonalds has jensen alpha of (0.01), we recommend you to check McDonalds's last-minute market performance to make sure the company can sustain itself next year.McDonalds' insider trading activities
Some recent studies suggest that insider trading raises the cost of capital for securities issuers and decreases overall economic growth. Trading by specific McDonalds insiders, such as employees or executives, is commonly permitted as long as it does not rely on McDonalds' material information that is not in the public domain. Local jurisdictions usually require such trading to be reported in order to monitor insider transactions. In many U.S. states, trading conducted by corporate officers, key employees, directors, or significant shareholders must be reported to the regulator or publicly disclosed, usually within a few business days of the trade. In these cases McDonalds insiders are required to file a Form 4 with the U.S. Securities and Exchange Commission (SEC) when buying or selling shares of their own companies.
Tiffanie Boyd over three weeks ago Disposition of 1054 shares by Tiffanie Boyd of McDonalds subject to Rule 16b-3 | ||
Thompson Donald over a year ago Exercise or conversion by Thompson Donald of 41800 shares of McDonalds subject to Rule 16b-3 |
McDonalds' Outstanding Corporate Bonds
McDonalds issues bonds to finance its operations. Corporate bonds make up one of the largest components of the U.S. bond market, which is considered the world's largest securities market. McDonalds uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most McDonalds bonds can be classified according to their maturity, which is the date when McDonalds has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
MCDONALDS P 6375 Corp BondUS580135BY65 | View | |
MCDONALDS P MEDIUM Corp BondUS58013MEC47 | View | |
MCDONALDS P MEDIUM Corp BondUS58013MEH34 | View | |
MCDONALDS P MEDIUM Corp BondUS58013MEF77 | View | |
MCDONALDS PORATION MTN Corp BondUS58013MFN92 | View | |
US58013MFL37 Corp BondUS58013MFL37 | View | |
MCDONALDS PORATION MTN Corp BondUS58013MFM10 | View | |
MCD 515 09 SEP 52 Corp BondUS58013MFT62 | View |
Understand McDonalds' technical and predictive indicators
Using predictive indicators to make investment decisions involves analyzing McDonalds' various financial and market-based factors to help forecast future trends and identify investment opportunities. Select the indicators that are most relevant to your investment strategy. Each indicator has its own strengths and weaknesses, so it's essential to combine multiple indicators to get a more comprehensive view of the market and reduce the risk of making poor decisions based on limited data.
Risk Adjusted Performance | 0.0352 | |||
Market Risk Adjusted Performance | 0.0868 | |||
Mean Deviation | 0.7504 | |||
Semi Deviation | 1.35 | |||
Downside Deviation | 1.45 | |||
Coefficient Of Variation | 2287.92 | |||
Standard Deviation | 1.1 | |||
Variance | 1.22 | |||
Information Ratio | (0.06) | |||
Jensen Alpha | (0.01) | |||
Total Risk Alpha | (0.12) | |||
Sortino Ratio | (0.04) | |||
Treynor Ratio | 0.0768 | |||
Maximum Drawdown | 6.7 | |||
Value At Risk | (1.53) | |||
Potential Upside | 1.48 | |||
Downside Variance | 2.11 | |||
Semi Variance | 1.82 | |||
Expected Short fall | (0.67) | |||
Skewness | (1.82) | |||
Kurtosis | 6.87 |
Risk Adjusted Performance | 0.0352 | |||
Market Risk Adjusted Performance | 0.0868 | |||
Mean Deviation | 0.7504 | |||
Semi Deviation | 1.35 | |||
Downside Deviation | 1.45 | |||
Coefficient Of Variation | 2287.92 | |||
Standard Deviation | 1.1 | |||
Variance | 1.22 | |||
Information Ratio | (0.06) | |||
Jensen Alpha | (0.01) | |||
Total Risk Alpha | (0.12) | |||
Sortino Ratio | (0.04) | |||
Treynor Ratio | 0.0768 | |||
Maximum Drawdown | 6.7 | |||
Value At Risk | (1.53) | |||
Potential Upside | 1.48 | |||
Downside Variance | 2.11 | |||
Semi Variance | 1.82 | |||
Expected Short fall | (0.67) | |||
Skewness | (1.82) | |||
Kurtosis | 6.87 |
Consider McDonalds' intraday indicators
McDonalds intraday indicators are useful technical analysis tools used by many experienced traders. Just like the conventional technical analysis, daily indicators help intraday investors to analyze the price movement with the timing of McDonalds stock daily movement. By combining multiple daily indicators into a single trading strategy, you can limit your risk while still earning strong returns on your managed positions.
McDonalds Corporate Filings
F4 | 26th of November 2024 The report filed by a party regarding the acquisition or disposition of a company's common stock, as well as derivative securities such as options, warrants, and convertible securities | ViewVerify |
10Q | 7th of November 2024 Quarterly performance report mandated by Securities and Exchange Commission (SEC), to be filed by publicly traded corporations | ViewVerify |
8K | 29th of October 2024 Report filed with the SEC to announce major events that shareholders should know about | ViewVerify |
F3 | 29th of August 2024 The report used by insiders such as officers, directors, and major shareholders (beneficial owners holding more than 10% of any class of the company's equity securities) to declare their ownership of a company's stock | ViewVerify |
McDonalds Stock media impact
Far too much social signal, news, headlines, and media speculation about McDonalds that are available to investors today. That information is available publicly through McDonalds media outlets and privately through word of mouth or via McDonalds internal channels. However, regardless of the origin, that massive amount of McDonalds data is challenging to quantify into actionable patterns, especially for investors that are not very sophisticated with ever-evolving tools and techniques used in the investment management field.
A primary focus of McDonalds news analysis is to determine if its current price reflects all relevant headlines and social signals impacting the current market conditions. A news analyst typically looks at the history of McDonalds relative headlines and hype rather than examining external drivers such as technical or fundamental data. It is believed that price action tends to repeat itself due to investors' collective, patterned thinking related to McDonalds' headlines and news coverage data. This data is often completely overlooked or insufficiently analyzed for actionable insights to drive McDonalds alpha.
McDonalds Sentiment by Major News Outlets
Investor sentiment, mood or attitude towards McDonalds can have a significant impact on its stock price or the market as a whole. This sentiment can be positive or negative, and various factors, such as economic indicators, news events, or market trends, can influence it. When investor sentiment is positive, investors are more likely to buy stocks, increasing demand and increasing the stock price. Positive investor sentiment can be driven by good news about the company or the broader market, such as solid earnings reports or positive economic data.
Note that negative investor sentiment can cause investors to sell stocks, leading to a decrease in demand and a drop in the stock price. Negative sentiment can be driven by factors such as poor earnings reports, negative news about the company or industry, or broader economic concerns. It's important to note that investor sentiment is just one of many factors that can affect stock prices. Other factors, such as company performance, industry trends, and global economic conditions, can also play a significant role in determining the value of a stock.
McDonalds Historical Investor Sentiment
Investor biases related to McDonalds' public news can be used to forecast risks associated with an investment in McDonalds. The trend in average sentiment can be used to explain how an investor holding McDonalds can time the market purely based on public headlines and social activities around McDonalds. Please note that most equities that are difficult to arbitrage are affected by market sentiment the most.
McDonalds' market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for McDonalds and other traded tickers. The bigger the bubble, the more accurate the estimated score. Higher bars for a given day show more participation in the average McDonalds news discussions. The higher the estimate score, the more favorable the investor's outlook on McDonalds.
McDonalds Corporate Directors
Richard Lenny | Independent Director | Profile | |
Margaret Georgiadis | Independent Director | Profile | |
John Rogers | Independent Director | Profile | |
Sheila Penrose | Independent Director | Profile |
Check out Correlation Analysis to better understand how to build diversified portfolios, which includes a position in McDonalds. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in main economic indicators. For information on how to trade McDonalds Stock refer to our How to Trade McDonalds Stock guide.You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
Is Hotels, Restaurants & Leisure space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of McDonalds. If investors know McDonalds will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about McDonalds listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.01) | Dividend Share 6.68 | Earnings Share 11.42 | Revenue Per Share 36.01 | Quarterly Revenue Growth 0.027 |
The market value of McDonalds is measured differently than its book value, which is the value of McDonalds that is recorded on the company's balance sheet. Investors also form their own opinion of McDonalds' value that differs from its market value or its book value, called intrinsic value, which is McDonalds' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because McDonalds' market value can be influenced by many factors that don't directly affect McDonalds' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
In summary, please note that there is a difference between McDonalds' value and its price, as these two are different measures arrived at by various means. Investors typically determine if McDonalds is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, McDonalds' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.