Entering text into the input field will update the search result below

McDonald's Remains An Excellent Long-Term Buy

Mar. 09, 2020 9:35 PM ETMcDonald's Corporation (MCD)24 Comments
Individual Trader profile picture
Individual Trader


  • Momentum was once more to the fore in Q4 earnings.
  • Earnings projections for 2020 and 2021 continue to increase.
  • We look at the state of the dividend.
  • Looking for more stock ideas like this one? Get them exclusively at Elevation Code. Get started today »

The rout in US stocks seems far from done yet as the VIX (Volatility index) once again today (March 9th) finishes on a higher high. The question for investors here at present is where will stocks bottom. Given the sheer collapse of stock prices over the past while, it remains possible that the 4-year cycle low in the S&P is still ahead of us. Remember, those lows eventually bottomed below $2.400 a share, so we may have significant down-side still to go here in the S&P.

Warren Buffett once said,

Only when the tide goes out do you discover who's been swimming naked.

The lower equity markets go, the more you are going to see how too much leverage can expose even the best of companies. One such company, though, which definitely has stood the test of time when it comes to shareholder returns has been McDonald's (NYSE:MCD). The company has now raised its dividend for 43 straight years, and the model seems to be going from strength to strength.

We state this because the fourth quarter reported almost 6% global comp sales. This is really encouraging, given the fact the comps have now grown consistently every quarter for the past 4 years. A few milestones were mentioned on the fourth quarter earnings call by new CEO - Chris Kempczinski.

  • $100 billion in system-wide revenues took place in 2019.
  • Global comp sales grew by 5.9%, which was the restaurant chain's best growth number in 10+ years.
  • The US market (largest by far for MCD) grew comps by 5% in 2019, which was its best growth number for 13 years.

McDonald's continues to defy the odds as its successful model continues to be leveraged for maximum results. At present, MCD trades with a forward earnings multiple of 23.4, which is just below its


Elevation Code's blueprint is simple. To relentlessly be on the hunt for attractive setups through value plays, swing plays or volatility plays. Trading a wide range of strategies gives us massive diversification, which is key. We started with $100k. The portfolio will not stop until it reaches $1 million.

Join Us here


This article was written by

Individual Trader profile picture

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.