Dow Review: McDonald's

The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.

Over the next couple of weeks, John and David will be revisiting some calls they made on individual stocks of the Dow. Today, they're talking McDonald's. This company is down around 8% so far in 2012 compared with just a 5% or so gain for the Dow average as a whole. McDonald's has been a Dow leader over the past few years, so this is a disappointing result. John and David thought that McDonald's would outperform, so this result is surprising to them. The biggest risk facing the company, of course, was a slowdown and that appears to be the culprit here. Same-store sales are still growing, but they aren't growing as fast. McDonald's will have to keep adjusting its menu to keep moving forward. There's plenty of heat from competitors like Chipotle, YUM! Brands, and Panera. It looks as though some economic weakness is on the way. Over the long term, John and David still think this stock will beat the market.

McDonald's offers up a surprisingly generous dividend yield. If you're interested in learning about some more outstanding, high-yielding companies, The Motley Fool has compiled a special free report outlining our top nine dependable, dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here to discover the winners we've picked.

David Meier has no positions in the stocks mentioned above. John Reeves owns shares of Chipotle Mexican Grill. The Motley Fool owns shares of Chipotle Mexican Grill, McDonald's, and Panera Bread. Motley Fool newsletter services recommend Chipotle Mexican Grill, McDonald's, Panera Bread, and Yum! Brands. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 1956865, ~/Articles/ArticleHandler.aspx, 7/31/2014 4:04:32 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement