Is It Time to Avoid McDonald's Stock?
The McDonald's (NYSE: MCD) story is the American dream. The company has grown into an absolute juggernaut of capitalism, and is the largest restaurant chain in the world. That said, it's been a bit of a boring investment over the last five years. The burger chain has struggled to keep up with the broader market, and doesn't look like the buy that it was in years past.McDonald's has underperformed the S&P 500 by 20% over the last five years. The company has had on and off years, with top-line revenue growth not always hitting the mark. Most recently, full-year 2024 results were flat at $6.39 billion versus $6.4 billion in 2023, and came in below estimates of $6.44 billion, while net income declined 1% to a little under $2.02 billion, or $11.39 per share compared to 2023's earnings of $11.56 per diluted share.Part of the reasoning for the recent weak quarter was an E. Coli outbreak that impacted certain menu items, such as the ever-loved quarter pounder. While this was certainly part of the problem, it is crucial to realize that the fourth quarter wasn't the whole story. McDonald's saw declines before the fourth quarter. Global comparable sales declined 1.5% in the third quarter, and 1% in the second quarter, showing broader weakness for the company.Continue reading
The McDonald's (NYSE: MCD) story is the American dream. The company has grown into an absolute juggernaut of capitalism, and is the largest restaurant chain in the world. That said, it's been a bit of a boring investment over the last five years. The burger chain has struggled to keep up with the broader market, and doesn't look like the buy that it was in years past.
McDonald's has underperformed the S&P 500 by 20% over the last five years. The company has had on and off years, with top-line revenue growth not always hitting the mark. Most recently, full-year 2024 results were flat at $6.39 billion versus $6.4 billion in 2023, and came in below estimates of $6.44 billion, while net income declined 1% to a little under $2.02 billion, or $11.39 per share compared to 2023's earnings of $11.56 per diluted share.
Part of the reasoning for the recent weak quarter was an E. Coli outbreak that impacted certain menu items, such as the ever-loved quarter pounder. While this was certainly part of the problem, it is crucial to realize that the fourth quarter wasn't the whole story. McDonald's saw declines before the fourth quarter. Global comparable sales declined 1.5% in the third quarter, and 1% in the second quarter, showing broader weakness for the company.
