Is McDonalds Stock a Good Investment?

McDonalds Investment Advice

  MCD
To provide specific investment advice or recommendations on McDonalds stock, we recommend investors consider the following general factors when evaluating McDonalds. This will help you to make an informed decision on whether to include McDonalds in one of your diversified portfolios:
  • 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
Strong Hold
Macroaxis provides trade recommendations on McDonalds to complement and cross-verify current analyst consensus on McDonalds. Our advice engine determines the firm's potential to grow exclusively from the perspective of an investor's current risk tolerance and investing horizon. To make sure McDonalds is not overpriced, please verify all McDonalds fundamentals, including its shares owned by insiders, gross profit, debt to equity, as well as the relationship between the price to earning and cash and equivalents . Given that McDonalds has a price to sales of 7.56 X, we recommend you to check McDonalds market performance and probability of bankruptcy to ensure the company can sustain itself for the next few years given your last-minute risk tolerance and investing horizon.

Market Performance

Very WeakDetails

Volatility

Very steadyDetails

Hype Condition

Low keyDetails

Current Valuation

UndervaluedDetails

Odds Of Distress

Very LowDetails

Economic Sensitivity

Follows the market closelyDetails

Investor Sentiment

AlarmedDetails

Analyst Consensus

Strong BuyDetails

Financial Strenth (F Score)

HealthyDetails

Financial Leverage

Not RatedDetails

Reporting Quality (M-Score)

Possible ManipulatorDetails

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 72.0% of the company shares are owned by institutional investors. The company has Price/Earnings To Growth (PEG) ratio of 1.93. McDonalds recorded earning per share (EPS) of 11.76. The entity last dividend was issued on the 3rd of June 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:
McDonalds generated a negative expected return over the last 90 days
About 72.0% of the company shares are owned by institutional investors
On 17th of June 2024 McDonalds paid $ 1.67 per share dividend to its current shareholders
Latest headline from cnbc.com: Fugitive ex-CEO of investment firm arrested on securities, wire fraud charges

McDonalds Quarterly Liabilities And Stockholders Equity

53.51 Billion

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
2020-07-28
2020-06-300.740.66-0.0810 
2008-04-22
2008-03-310.70.810.1115 
2015-10-22
2015-09-301.271.40.1310 
2005-04-21
2005-03-310.430.560.1330 
2017-04-25
2017-03-311.331.470.1410 
2021-07-28
2021-06-302.112.370.2612 
2023-04-25
2023-03-312.332.630.312 
2021-10-27
2021-09-302.462.760.312 

McDonalds Target Price Consensus

We track the performance of the top 100 financial experts across various large and mid-size financial boutiques. McDonalds target price is determined by taking all analyst projections and averaging them out. There is no one specific way to measure analysts' performance other than comparing it to past results via a very sophisticated attribution analysis. McDonalds' target price projections below should be used in combination with other traditional price prediction techniques such as stock price forecasting, investor sentiment analysis, technical analysis, earnings estimate, and various momentum models.
   36  Strong Buy
Most McDonalds analysts issue ratings four times a year, at intervals of three months. Ratings are usually accompanied by a target price to help potential investors understand McDonalds stock's fair price compared to its market value. Analysts arrive at stock ratings after researching the public financial statements of McDonalds, talking to its executives and customers, or listening to those companies' conference calls.
Macroaxis Advice   Exposure   Valuation

McDonalds Target Price Projection

McDonalds' current and average target prices are 250.79 and 300.26, respectively. The current price of McDonalds is the price at which McDonalds is currently trading. On the other hand, McDonalds' target price is what analysts think the stock is worth or could sell for in the future. The more significant the discrepancy between the two prices, the more it stimulates investors to act.

Current Price

McDonalds Market Quote on 20th of June 2024

Low Price249.35Odds
High Price254.35Odds

250.79

Target Price

Analyst Consensus On McDonalds Target Price

Low Estimate273.24Odds
High Estimate333.29Odds

300.26

Historical Lowest Forecast  273.24 Target Price  300.26 Highest Forecast  333.29
Note that most analysts generally publish their price targets in research reports on specific companies, along with recommendations for the company's stock.Although price targets are often quoted in the financial news media, there could be a delay between the publication of the latest analyst outlook on McDonalds and the information provided on this page.

McDonalds Analyst Ratings

McDonalds' analyst stock recommendations are determined by taking an average estimate of all analysts we track and classifying them as Strong Buy, Buy, Hold, Strong Sell, or Sell. Ratings generally communicate what analysts sense about McDonalds stock, and they use a lot of effort and time to analyze it and arrive at a rating. That suggests that analyst recommendations are the outcome of an objective and thorough examination of McDonalds' financials, market performance, and future outlook by experienced professionals. McDonalds' historical ratings below, therefore, can serve as a valuable tool for investors.

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
Royal Bank Of Canada2024-03-31
7.6 M
Bank Of New York Mellon Corp2024-03-31
6.1 M
Legal & General Group Plc2024-03-31
5.9 M
T. Rowe Price Associates, Inc.2024-03-31
5.9 M
Ubs Group Ag2024-03-31
5.6 M
Gallagher Fiduciary Advisors, Llc2024-03-31
5.5 M
Nuveen Asset Management, Llc2024-03-31
5.5 M
Capital Research Global Investors2024-03-31
5.5 M
Charles Schwab Investment Management Inc2024-03-31
5.5 M
Vanguard Group Inc2024-03-31
69.1 M
Blackrock Inc2024-03-31
50.8 M
Note, although McDonalds' institutional investors appear to be way more sophisticated than retail investors, it remains unclear if professional active investment managers can reliably enhance risk-adjusted returns by an amount that exceeds fees and expenses.

McDonalds' market capitalization trends

The company currently falls under 'Mega-Cap' category with a total capitalization of 180.74 B.

Market Cap

183.41 Billion

McDonalds' profitablity analysis

Last ReportedProjected 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)
The company has Net Profit Margin of 0.33 %, which implies that it may need a different competitive strategy as even a very small decline in it revenue may erase profits and result in a net loss. This is way below average. In the same way, it shows Net Operating Margin of 0.44 %, which entails that for every 100 dollars of revenue, it generated $0.44 of operating income.
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

The data published in McDonalds' official financial statements typically reflect McDonalds' business processes, product offerings, services, and other fundamental events. However, there are additional fundamental indicators that are easier to understand and visualize along the underlying realities that are driving McDonalds' quantitative information. For example, before you start analyzing numbers published by McDonalds accountants, it's essential to understand McDonalds' liquidity, profitability, and earnings quality within the context of the Hotels, Restaurants & Leisure space in which it operates.
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 0.1399 % which means that on every $100 spent on assets, it made $0.1399 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 June 20, 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 ReportedProjected for Next Year
Book Value Per Share(6.47)(6.14)
Tangible Book Value Per Share(11.79)(11.20)
Enterprise Value Over EBITDA 21.56  22.64 
Price Book Value Ratio(45.86)(43.56)
Enterprise Value Multiple 21.56  22.64 
Price Fair Value(45.86)(43.56)
Enterprise Value216.2 B227 B
The analysis of McDonalds' management efficiency is an essential part of evaluating and assessing the financial and operational performance of the entity. It is also vital to analyze McDonalds' future growth prospects and the overall market conditions to determine the value and potential of its stock. The analysis involves studying a range of financial metrics such as revenue, earnings, profit margins, cash flow, debt, market share, and external factors such as economic trends, industry outlook, competition, and government regulations. The goal of McDonalds Stock analysis is to determine whether it is undervalued, fairly valued, or overvalued and to make informed investment decisions.
Dividend Yield
0.0266
Forward Dividend Yield
0.0266
Forward Dividend Rate
6.68
Beta
0.714

Basic technical analysis of McDonalds Stock

As of the 20th of June, McDonalds secures the mean deviation of 0.7388, and Risk Adjusted Performance of (0.09). 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 variance, as well as the relationship between the maximum drawdown and skewness to decide if McDonalds is priced favorably, providing market reflects its recent price of 250.79 per share. Given that McDonalds has information ratio of (0.16), 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.

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.

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.

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

11th of June 2024
Other Reports
ViewVerify
F3
31st of May 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
F4
30th of May 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
28th of May 2024
Other Reports
ViewVerify
McDonalds time-series forecasting models is one of many McDonalds' stock analysis techniques aimed to predict future share value based on previously observed values. Time-series forecasting models ae widely used for non-stationary data. Non-stationary data are called the data whose statistical properties e.g. the mean and standard deviation are not constant over time but instead, these metrics vary over time. These non-stationary McDonalds' historical data is usually called time-series. Some empirical experimentation suggests that the statistical forecasting models outperform the models based exclusively on fundamental analysis to predict the direction of the market movement and maximize returns from investment trading.

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 Maximum Pain Price across 2024-06-21 Option Contracts

McDonalds' options can also be used to analyze investors' bias and current market sentiment in the context of behavioral finance. For example, Max pain usually refers to a trading concept that asserts that market manipulation can cause the market price of McDonalds close to the expiration of its current option contract to expire worthlessly. According to most research, about 35% of options are not executed, with roughly 50% traded out before expiration. So, Max pain occurs when market makers reach a net favorable position across all options at a strike price where option holders stand to lose the most money. By contrast, option sellers may reap the most after selling more options than buying, causing them to expire worthlessly. Please continue to view the detailed analysis of McDonalds' options.

McDonalds Corporate Directors

Richard LennyIndependent DirectorProfile
Margaret GeorgiadisIndependent DirectorProfile
John RogersIndependent DirectorProfile
Sheila PenroseIndependent DirectorProfile

Additional Information and Resources on Investing in McDonalds Stock

When determining whether McDonalds is a strong investment it is important to analyze McDonalds' competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact McDonalds' future performance. For an informed investment choice regarding McDonalds Stock, refer to the following important reports:
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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
0.086
Dividend Share
6.38
Earnings Share
11.76
Revenue Per Share
35.507
Quarterly Revenue Growth
0.046
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.