Images

Image source: Flickr user jaunpol under Creative Commons license.

Barring the unforeseen, McDonald's Corporation (NYSE:MCD) will end 2015 as one of the top-performing Dow Jones Industrials stocks. As I write this, the company ranks second out of 30 index components in price appreciation for the year, having delivered a 26.5% price gain to shareholders. If you include McDonald's generous dividend, which currently yields nearly 3%, the "MCD" symbol has achieved a total return of 30.9% year to date.

A stream of favorable headlines this year helped improve investor perception around a turnaround attempt that even management of the burger colossus admits is still at an early stage. Below, let's recap some of the best and most meaningful headlines of the year.

A new CEO takes over
On Jan. 28, McDonald's announced the retirement of CEO Donald Thompson and its board's selection of Steve Easterbrook as his replacement. Going into the post, Easterbrook was known for his work turning around McDonald's U.K. business, and at the time, was serving as McDonald's "chief brand officer."

In hindsight, it's simple to understand why McDonald's board chose Easterbrook to take the helm. The new CEO understands that it's possible to change the perception around the quick service chain by instituting substantive change while simultaneously sharpening the brand message. One of Easterbrook's key initiatives is to remake the aging franchise into a "modern, progressive burger company." Whether he'll be able to follow through with this concept remains to be seen, but at least initially in 2015, both customers and investors find it credible.

A long-awaited menu change
With the reception that "all-day breakfast" has received this fall and winter, one wonders why it wasn't rolled out sooner than 2015. But over the years, as this idea has been floated within the company's executive team, the operational difficulties of pulling it off have scuttled any previous initiatives.

This year, a desperation to boost wilting traffic seemed to trump operational concerns, and the company instituted a limited version of all-day breakfast on Sept. 1, with a nationwide rollout on Oct. 6.

As I described in a recent article, this menu innovation's most meaningful contribution to McDonald's may be an increase in throughput, which could build a foundation under previously shaky North American comparable-store sales. According to initial data, the new menu is bumping up McDonald's traffic and raising the average check of those who give it a try outside of lunch hours. 

Resculpting a static image
In September, the company reached for "progressive" bona fides by revealing that over the next ten years,16,000 restaurants in the U.S. and Canada would transition completely to cage-free eggs.

Far from a clumsy PR move, this goal represents a real evolution that won't be easy for the company to implement. It also strikes against an ingrained perception many of us have shared that McDonald's supply chain will always remain the industrial agriculture distribution monolith of years past.

Perhaps more importantly, the initiative looks far ahead: By 2025, many of the youngest millennials will comprise an important purchasing constituency for McDonald's. It's better to institute difficult change now in order to have a chance at serving these future patrons 10 years from today. 

Nine-tenths of 1%
On Oct. 22, McDonald's released its third-quarter 2015 earnings, the ostensible highlight of which was a not-unexpected rise in global comparable sales of 4%, due to a weak comparable prior-year quarter that had been plagued by supplier issues in Asia. 

However, investors latched on to one important detail that became a catalyst for the stock's quick ascension in the last several weeks of 2015, a U.S. comparable-sales increase of 0.9%. While in not very distant memory, such a result would have sparked a sell-off in McDonald's shares, the opposite happened with this earnings report. Shares immediately rallied 8%, and they really haven't stopped for breath since.

Investors bid up McDonald's stock upon realizing that this was the first quarterly U.S. comps gain in two years. The mere presence of an increase provided support for Easterbrook's actions, and has fueled optimism that the company might be at the start of a positive comps trend. We'll find out next month if this is the case, when McDonald's reports on its final quarter of 2015.

The real estate will stay in-house
Over the years, McDonald's ownership of real estate has provided rich source material for finance professors seeking to illustrate the innovative ways a corporation can drive long-term value for its shareholders. Being a landlord to its franchisees is one of the primary advantages that boost McDonald's operating margins past its competitors. And each year, the company's equity in its real estate assets rises.

Under thinly veiled pressure from activist investors, McDonald's management team and board formally considered spinning off the company's enormous real estate holdings into a real estate investment trust this year in order to unlock the appreciated value of land and buildings. While this would undoubtedly have benefited investors in the near term, the company wouldn't have been able to maintain its lucrative financial model in the years to come.

On Nov. 10, a few weeks after reporting the third quarter discussed above, McDonald's management offered up one of the sweetest headlines of the year: declining to pursue a REIT spinoff strategy at its annual investor conference. Easterbrook offered the following succinct reason: "The potential upside isn't compelling, and the future value at risk too great." Investors hope that management will make many more common sense decisions like this in 2016. 

Asit Sharma has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.