McDonald’s Corporation Shares

McDonald’s Corporation operates as the operator of restaurants and franchises under the same name in hundreds of countries around the world. The restaurants provide customers with traditional and regionally adapted food and drinks. The McDonald’s franchise also depends on the nuances of the local market. It can be a traditional franchise, license, or branch. About 80% of McDonald’s restaurants are independent franchises.

The multinational corporation generates the majority of its revenue from franchises. Their share in total revenue amounts to a staggering 61%. The company-owned restaurants constitute another portion of the revenue, primarily obtained from the United States. McDonald’s Corporation is one of the largest international companies, and its brand is highly recognizable. That alone makes it a great choice for savvy investors.

McDonald's Corporation Shares


Company finances are managed by assuming risk. To cover long-term debts in 2022, it would require 7.78 years of net profit. This is a poor indicator, but we know that the company’s profitability indicators are good – the portion of long-term liabilities in the current year’s Operating Income is only 7.1%. The company constantly requires capital investments. $1 invested in long-term assets earns a staggering $2.67 EPS.

The dynamics of the company’s profit growth have a positive and stable trend. The average EPS growth over the past 10 years was 4.51%, while the average EPS growth over the past 5 years was 5.51%. This contributes to a large-scale share buyback program. The average return on undistributed profit over the past 10 years is 11.15%. We consider this to be a good return.

McDonald’s Corporation invests exclusively within its competency framework. The truth is, buildings and land constitute over half of the company’s assets. This is also a good investment. If shareholders of the company wanted to sell their shares and invest in the US 10-year bonds and receive the same return as the company provided in 2022, they would need to sell the shares for $204.

During the writing process, this is lower than the market price. This indicates two obvious things: 1) investors highly value the company’s performance results; 2) the underlying dollar interest rates are so high that investing in stocks can become less attractive. It could be precisely due to this that we are witnessing a correction in the market during the writing process.

McDonald’s Corporation shares

In 2022, the company released over 3.9 billion USD for the repurchase of its own shares. They bought 15.8 million shares. As a result, the EPS (Earnings Per Share) decreased at a slower pace than the total Net Income. The company’s Equity Capital became negative. This is normal for a stable cash flow generating company that allocates a portion of its earned profit to shareholders through share repurchases.

The standard deviation of the stock price is 13.42%, and the beta is 0.64. The average annual dividend growth rate reaches a remarkable 7%. With these indicators, we have a sufficiently safe stock with growth potential. The price perspective calculated using the GRAPES method is 550 USD.

The Intelligent Investor Score:

McDonald's Corporation Shares

From the announcement of the idea in April 2013, the investor received a pre-tax return of 223% or an average of 12.1% per year. We believe that the stock price can continue to grow at a similar or even higher pace over the next five years, given favorable market conditions. Our recommendation is to ACCUMULATE shares of McDonald’s Corporation.

McDonald's Corporation Shares

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