McDonald's: Growing In Foreign Markets

| About: McDonald's Corporation (MCD)

McDonald's (NYSE:MCD) has been around for decades and its stock has always provided great value to investors. McDonald's growth began in the United States, but as the company grew larger and larger, further expansion was required to fuel the company's growth. McDonald's expansion into foreign countries has been a slam dunk and its latest numbers show that there is no reason for its foreign success not to continue.

The following chart shows McDonald's share in the fast food industry.

(Click to enlarge)

McDonald's recently released its sales numbers for August and Asia/Pacific, Middle East, and Africa (APEMA) sales grew by 5.7% compared to last year. McDonald's also announced that it is planning on investing $1.5 billion to open an estimated 1,300 additional restaurants globally in 2012. Two hundred and fifty of the 1,300 restaurants are set to open in China, where McDonald's has been focusing most of its attention. Year to date too, APEMA sales are up over 2.8%, which shows that in addition to McDonald's new expansion plans, its revenue is still growing from existing restaurants.

McDonald's also reported that it will be venturing and developing restaurants in Siberia. This news comes after it received positive sales numbers from its restaurants in Eastern Russia.

There is a potential red flag with McDonald's to be aware of, though. McDonald's European sales didn't increase greatly during the summer Olympics, even though it had a focused advertising campaign there. Some believe that without a heavy advertising campaign continuing in Europe, McDonald's could see a sizeable decline in total sales. The European economy is still a mess and McDonald's generates 40% of its global revenue from Europe. Even though the company is performing strongly at home and around the world, this could end up being a scenario similar to the one we saw with Ford Motor Company (NYSE:F), where European revenue dragged down share value.

McDonald's remains the strongest and brightest fast food company worldwide. There may be more attractive high growth options available like Chipotle (NYSE:CMG), Panera Bread (NASDAQ:PNRA), Starbucks (NASDAQ:SBUX), and Domino's Pizza (NYSE:DPZ), however there are no other options that are going to be as safe and yield as great of a dividend as McDonald's. Stick with the best company in the fast food sector, buy McDonald's on any pullback because this stock isn't going away.

Disclosure: I am long F. 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.

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