Commonly called McDo, McDonald's is the world's largest fast food chain. The concept was created in 1940 by Richard and Maurice McDonald. Is it still necessary to present its famous products all over the world, such as the Big Mac or the Cheese Royal? The company is organized in the form of franchises and in 2007 had about 32,000 restaurants and 400,000 employees in 2008.
We acquired McDo a year ago, and despite a 14% drop in the dollar and a mixed start to 2011, we are generating profitability of more than 5% on this stock. MCD fait partie des quelques rares sociétés a offrir de la valeur tout en étant un relais de croissance intéressant. THE dividend yield à long terme s'élève ainsi à un très correct 3.48%, tandis que la croissance annuelle des distributions est de 14.82%. McDonald's a augmenté son dividende durant 34 années consécutives. Malgré le rendement et la croissance soutenue, le taux de distribution demeure parfaitement acceptable, à 50.66%, ce qui laisse une bonne marge de manoeuvre à la société en cas de passage difficile, et assure la progression du dividende dans le futur.
Seule petite ombre au tableau, la volatility assez élevée, se monte à 19.13%. Celle-ci est surtout due à la progression importante du cours de McDo. On constate d'ailleurs ci-dessous que le title has significantly outperformed the market for many years (+20'000% since 1970!).
In view of these figures, our analysis model considers that McDonald's is still an interesting buying opportunity.
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Congratulations on your article,
The difficulty is to detect this type of high-growth company in the early years, even if we see on the graph that in the first 10 years, the price tended to fall. It was only with the beginning of the 80s that the price began its extraordinary rise.
I will be looking at French companies that have a similar background for a future post on my blog. http://www.argentmecanique.com.
THANKS
Thanks for your comment Didier. Indeed, we are always smarter afterwards, and past performance does not guarantee tomorrow's. This is why I focus on companies that are in rather defensive sectors and that have a long history of dividend growth. For me, this is one of the important guarantees that the company is solid and that it has a strong chance of performing well in the future.