With a new strategy, called Plan to Win, the company changed its focus from being bigger to being better. Customers noticed. Although fast-food sales have been strong this year for competitors such as Wendy's
Those looking through the earnings report will see news of weak sales in Germany and the start of efforts to revitalize the brand in the U.K. So not everything is A-OK. On balance, though, McDonald's is a turnaround story that is looking to become "our customers' favorite place and way to eat."
Don't ignore current CEO Charlie Bell. He was smart to leave the strategy alone and build on its success -- and let the free cash flow grow. That cash flow will allow the company to use $1.3 billion to buy back stock and pay dividends in 2004.
McDonald's stock sells at an earnings premium to its peers. With better operating margins than pizza, taco, and chicken purveyor Yum! Brands
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Fool contributor W.D. Crotty owns stock in McDonald's and Yum! Brands.