3 Reasons Why McDonald’s May Be The Perfect Stock For This Market Environment


  • McDonald’s is largely insulated from inflationary pressures given its mostly-franchised business model.
  • The company’s value offerings are delivering for consumers on a tight budget, and the fast-food giant’s digital efforts continue to resonate.
  • McDonald’s strong free cash flow generation in excess of cash dividends paid has helped contribute to McDonald’s multi-decade streak of consecutive annual dividend growth.
  • Though McDonald’s has a large net debt position and free cash flow faced pressure during 2022, we value shares at $306 at the high end of our fair value estimate range, indicating upside potential.
  • McDonald’s may be the perfect stock for this market environment, in our view.

M. Suhail

By Valuentum Analysts

Fast-food giant and dividend growth behemoth McDonald’s (NYSE:MCD) is one of our favorite stocks for consideration in this market environment for three reasons.

  • Because of its largely-franchised business model, McDonald’s rakes in new revenue from its franchisees and

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

Additional disclosure: Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, and RSP. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.

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