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We are fat and we know it. As Americans, we are on the leading edge of an obesity epidemic that parallels the socioeconomic collapse of Western Civilization. A quick look through any gathering place for Western culture will expose excessive thigh fat, belly rolls, and general sloth. This obesity epidemic has been blamed as the catalyst behind the destruction of all things. Bitter singles blame fat as the driver behind our miserable marriage and divorce rates, while angry citizens blast the Supreme Court decision to uphold ObamaCare as a costly backstop to justify obesity.

For investors, any backlash against the obesity epidemic would put the food industry well within the crosshairs for consumer protection groups. McDonald's (MCD) especially, always serves as the perfect scapegoat for America's unhealthy lifestyle. Despite the protests and lobbying, McDonald's stock will soldier on. The McDonald's restaurant playbook to serve food at a cheap price continues to prevail amid hard economic times.

Define Obesity

The Center for Disease Control uses the body mass index (BMI) to define obesity. The body mass index compares your height and weight together to arrive at a nominal figure. To calculate BMI, you will first divide your weight in pounds by your height in inches squared. From there, you will multiply this number times 703 and arrive at BMI. BMI = [(Weight in Pounds / (Height in Inches) x (Height in Inches)] x 703. The Center for Disease Control claims that adults with BMI between 25 and 29.9 are overweight. Adults with a BMI above 30 are obese.

The CDC claims that 36% of all American adults are obese. These adults are especially at risk for heart failure, cardiovascular disease, and diabetes. The Center attributes $147 billion worth of 2008 medical costs to obesity. Lawmakers, such as New York City's Michael Bloomberg, have proposed bans on large sodas and sugary drinks. Earlier this month, the London Assembly also called for a ban upon Olympic sponsors offering fattening food and beverages. This measure would have effectively shut out both Coca Cola (KO) and McDonald's from the 2012 Olympics.

Both measures, of course, are now ridiculed and rejected. Citizens on both sides of the Atlantic label government imposed sanctions on food and drink as unwelcome intrusions into their daily lives. McDonald's remains highly popular in this slowing economy, as hungry customers line up to purchase full meals for less than $7. In fact, a movement led by the National Association to Advance Fat Acceptance (NAAFA) and its roll of 11,000 members would prefer that we actually embrace gluttony.

McDonald's Responds

Despite the work of NAAFA, McDonald's now offers healthy choices on its menu, in response to consumer backlash against its traditional fare of hamburgers, fries, chicken nuggets, and Coca-Cola beverages. Demand for healthy additions to the menu reach crescendo following Morgan Spurlock's 2004 release of the movie Super Size Me. For 30 days, Spurlock only ate McDonald's for breakfast, lunch, and dinner. By the end of the documentary, Spurlock had gained 25 pounds, alongside elevated cholesterol levels, mild depression, and impotency. Super Size Me was nominated for an Academy award and grossed more than $20 million worldwide.

While criticizing Spurlock's film as inaccurate, McDonald's quietly expanded menu offerings to include breakfast oatmeal, tasty salads, smoothies, and 1% milk. For children, McDonald's has lowered the sodium content of its Happy Meals, and also serves them with fruit. It is now possible for health conscious customers to dine at McDonald's throughout the day, consume their recommended daily allowance of vitamins, and ingest less than 2,000 calories.

Healthy changes to the menu, of course, have allowed for brisk business at company owned and franchised restaurants. According to Keith O'Brien and the New York Times, McDonald's aggressive marketing campaign has helped reinvigorate positive perceptions of this company. McDonald's has incorporated the use of social media platforms alongside televised ads of everyday farmers to showcase food offerings that are tasty, whole, and American.

McDonald's is a Growth Stock

Over the past ten years, McDonald's stock has taken a helicopter lift from $20 to $90. Such impressive performance stands in sharp contrast to this Lost Decade of record numbers of real estate foreclosures, financial sector bailouts, recession, and failed government policies. The S&P 500, of course, offered nothing in terms of real returns, while the McDonald's fast food restaurant transformed itself into a growth stock. Today, McDonald's trades for 17 times earnings and pays out dividends at a 3-percent rate.

The dividend yield is highly attractive, considering the fact that savers are effectively locked into negative real returns on competing fixed income investments. In terms of growth, McDonald's is averaging a 9-percent annual increase in earnings over the course of the past three years. Profit growth has leveled off somewhat, after McDonald's remarkable 84% earnings increase between 2007 and 2008. In 2011, McDonald's made $5.5 billion in profits off of $27 billion revenue. At $90, this stock is fairly valued, in comparison to its dividend yield and projected growth rate.

McDonald's continues to steal share, while rivals Wendy's (WEN) and Burger King (BKW) lose patrons. The McCafé for premium roast coffee, hot chocolate, and mocha has even made the going rough for Starbucks (SBUX), which sputtered throughout the early parts of this decade before bottoming out at $10 per share and reversing course to $50. Recent aggressive moves into growth markets alongside expensive restaurant remodeling projects prove that McDonald's executives refuse to get fat and lazy off prior success. Ironically, McDonald's and its reformulated menu is the answer to the obesity epidemic.

Ronald McDonald is a clown, but he is no fool.

Source: The Obesity Epidemic: No Effect On McDonald's Stock