McDonald's?

[famousbrownbear]

No, I'm not hungry. What are you thoughts on McDonald's as an investment? Potentially a good global recession proof stock.

[mod edit]

 

[steelyman]

I own it and intend to hold it. It’s done well since I bought (2015) but I consider it more as a widows and orphans type for the future.

 

[Andre1969]

I have a few shares, and it's done pretty well, but I don't know if I'd call it "recession proof". It took a pretty big hit from around November, 1999 when it peaked out around $45/share, dropping to around $13-14 in early 2003. At least, according to the chart on Yahoo Finance.


I forget now when I first bought it, but I remember it had been because of a pretty high dividend. Maybe around 2005-2006, I think? But at some point, the dividend was either cut, or the share price went up faster, so the yield didn't keep up. I want to say it was paying around 4-5% at one point.


It did weather the Great Recession relatively well, though. It peaked out around $65/sh in August of 2008, and the lowest it got to was around $52. It did that several times, including around the March 9, 2009 official bottom.


But, it's around $175 today, and has a yield of around 2.6%. So, it's done pretty good. The dividend has also been pretty consistent about going up every year, too.

 

[steelyman]

I have a few shares, and it's done pretty well, but I don't know if I'd call it "recession proof".

I think that’s right. I have it classified as consumer discretionary, so if something major hits the consumer... but it’s not exactly high-end.

 

[cbo111]

I worked at McD's in the early 70's when a franchise fee was about $125K, and was quite profitable for owners. Back then I marveled at all the people that ate this crap food. In the decades since, I have mistakenly predicted the financial demise McD, BK, Taco Bell, and KFC for decades.

 

[Sunset]

I worked at McD's in the early 70's when a franchise fee was about $125K, and was quite profitable for owners. Back then I marveled at all the people that ate this crap food. In the decades since, I have mistakenly predicted the financial demise McD, BK, Taco Bell, and KFC for decades.

There is just no accounting for bad taste

Actually, I love it when traveling, last thing I want is to stop at some diner and get slow service, or food poisoning, or weird stuff, at least at McD's it's pretty consistent.

 

[braumeister]

Actually, I love it when traveling.

Me too. I rarely eat there but I really appreciate the ubiquitous clean bathrooms conveniently located at highway interchanges.

 

[Chuckanut]

When driving cross country alone, and with lots of miles to cover each day, I have my own MacDonalds method. Drive about two hours, stop at next MD, get one coffee and one $1 menu food item, stretch legs, use bathroom, use WiFi if necessary. Rinse and repeat. Amazingly I can go for 8 to 12 hours comfortably when I do this.

 

[Boho]

Consider:

Analysts predicted Chipotle would be the death of McDonald’s. They were wrong. [but] "while McDonald’s and other fast-food chains may be on top now, it’s far too early to declare their victory over the rest of the restaurant sector."

And today's news:

Chipotle shares jump after company crushes earnings estimates...

 

[ckelly78z]

I haven't been to McDonalds since they did away with the HighC orange drink.

I only invest in things I enjoy!

 

[marko]

I rarely eat there but I really appreciate the ubiquitous clean bathrooms conveniently located at highway interchanges.

We were once running through a part of Asia where the public restrooms were, uhhh....holes in the ground.

DW really, really needed a bathroom and lo and behold, McD's was around the corner with an awesome bathroom. She still talks about how clean it was; complete with the ubiquitous electric toilet seat.

 

[steelyman]

I do recall that skipping high school lunch and jumping in anyone’s car with the company of some girls was reason enough to head for the golden arches.

 

[MRG]

There is just no accounting for bad taste [emoji23][emoji23][emoji23]

Actually, I love it when traveling, last thing I want is to stop at some diner and get slow service, or food poisoning, or weird stuff, at least at McD's it's pretty consistent.

+1
I was sent to the UK and Amsterdam for a couple months. Even though I loved the native foods every week I'd do McDonalds. Pretty consistent except for the ketchup and green sauce in Amsterdam.

 

[steelyman]

I really wanted to order a “Royale With Cheese” and took the opportunity when it arose.

 

[marko]

+1
I was sent to the UK and Amsterdam for a couple months. Even though I loved the native foods every week I'd do McDonalds. Pretty consistent except for the ketchup and green sauce in Amsterdam.

We lived in France for a number of years. Every few weeks we'd get a hankering for 'home' and head to "McDoh" as they called it.

 

[YVRRocketSurgery]

With respect to the Chipotle factor, my opinion is skewed because locally with minimum wages going up, McD (and other fast food) prices have crept up also. A burger combo at McD runs around $8-9. At that price, I'd rather pay a dollar more and have a burrito bowl at Chipotle and glass of water. If I do eat at McDonalds, I'll using grab an item off the extra value menu.

I don't expect McDonalds to run into major trouble but as/if they start to get more into the fast casual pricing, I do think it will be a headwind.

 

[Sunset]

+1
I was sent to the UK and Amsterdam for a couple months. Even though I loved the native foods every week I'd do McDonalds. Pretty consistent except for the ketchup and green sauce in Amsterdam.

Last year, DW & I were in Vienna, had just done a walking tour and wanted to catch the subway to go to the summer palace.
So we wanted a quick bite, and right there in a historic area was McD
So we went in, and how lovely the computer order kiosks were there, so we pick English and order.
The place was FULL and crowded with locals !!
I guess all the tourists were eating at the local restaurants.
Some local fellow, started talking to us, and we had a nice conversation while waiting for food to be ready to pickup at the counter.
Upstairs they had a fancy coffee station/shop so we got a very nice coffee and pastry, as well, all part of McD, but with a slant localized for Vienna.

 

[Lakewood90712]

No, I'm not hungry. What are you thoughts on McDonald's as an investment? Potentially a good global recession proof stock. [mod edit]

"global recession proof stock " No such thing exists , except maybe Tobacco companies. That being said, it's one of the few in the restaurant franchise businesses proven as a consistent money maker for over 60 years.



Pssst - Here is a tip : Don't eat the food, but say '"Senior Coffee"at the counter
just that phrase will yield a significant return on investment. Use the same tip at Wendy's and Jack in the box.

 

[imoldernu]

A little bit older article about McDonalds embracing AI.

https://www.forbes.com/sites/edrensi/2018/07/11/mcdonalds-says-goodbye-cashiers-hello-kiosks/#1b7dfb166f14

Some more recent stories offer a future outlook of the trim down of costs, through automated on-call cooking, serving and generation of services at all levels. Imagine a full service Mcdonalds operated by three or four employees.

The broader message is in the long term planning for all labor intensive businesses. As change occurs many will fall by the wayside. Watch for corporation investment plans as an indicator of longer term viability and profitability

 

[Jeffman52]

As an investment it may be great but I haven't graced the door to a McD in over 25 years. I'm sure they have missed me

 

[SumDay]

I do recall that skipping high school lunch and jumping in anyone’s car with the company of some girls was reason enough to head for the golden arches.

As a girl who frequently jumped in anyone's car for food I especially enjoyed it when one of the guys paid. lol

And, no, I don't own McDonald's stock. I'd explain why, but it would cause the thread to be closed.

 

[Chuckanut]

Upstairs they had a fancy coffee station/shop so we got a very nice coffee and pastry, as well, all part of McD, but with a slant localized for Vienna.

There are some very nice McDonalds scattered around the world..

Here is a photo of one of the nicest McDonalds I have ever seen. It's in Porto, Portugal. Note the pastry case. No fried apple pie here.

 

[Hamlet]

I have a few shares, and it's done pretty well, but I don't know if I'd call it "recession proof". It took a pretty big hit from around November, 1999 when it peaked out around $45/share, dropping to around $13-14 in early 2003. At least, according to the chart on Yahoo Finance.


I forget now when I first bought it, but I remember it had been because of a pretty high dividend. Maybe around 2005-2006, I think? But at some point, the dividend was either cut, or the share price went up faster, so the yield didn't keep up. I want to say it was paying around 4-5% at one point.


It did weather the Great Recession relatively well, though. It peaked out around $65/sh in August of 2008, and the lowest it got to was around $52. It did that several times, including around the March 9, 2009 official bottom.


But, it's around $175 today, and has a yield of around 2.6%. So, it's done pretty good. The dividend has also been pretty consistent about going up every year, too.

I've owned it since about 2003. I bought it at about $21/share when it was on its way down to the $13/share you mentioned.

It has done really well for me. Adding fancy coffee and all-day breakfast to the menu has really boosted their sales. I'm not sure I'd recommend it at this valuation though. I think that if I could sell it tax-free here I probably would.

 

[NYEXPAT]

If it's good enough for Warren Buffet (to eat at every day), It's good enough for me! I try to have breakfast there at least once every two weeks or so.

 

[redduck]

No, I'm not hungry. What are you thoughts on McDonald's as an investment? Potentially a good global recession proof stock.

McDonald's is considered a recession resistant stock.