McDonald’s is easily one of the most recognisable brands, with the company being one of the largest fast-food chains in the world as of 2020. The company was founded by siblings, Richard and Maurice McDonald, on May 15th, 1940. The restaurant operated as a popular hamburger stand and laid the foundations of the mammoth global company well known around the world today. McDonald’s is headquartered in Chicago, Illinois, and has operations throughout the world, with its golden double-arch logo a symbol of the globalisation and transition of the American lifestyle. McDonald’s introduced the ‘Speedee Service System’ that forms the basis of how fast foods operate to date – a quick-service system that eliminated the need for waiters and waitresses.
But, while the McDonald brothers are credited with this innovation, it was the milkshake machines salesman, Ray Kroc, that saw the true potential of the restaurant model. After being amazed by how a single restaurant bought and operated multiple milkshake machines, Kroc joined the company as a franchisee and was incorporated into the McDonald’s Corporation in 1955. Kroc eventually edged out the McDonald brothers and took charge of expanding the company domestically and internationally. By the end of the 1960s, McDonald’s operated over 1,000 restaurants, and before the end of the 1980s, the number topped 10,000. Exponential growth continued in the 1990s, and by the turn of the millennium, McDonald’s had a presence in over 100 countries, operating over 35,000 restaurants.
In the late 1990s and early 2000s, McDonald’s sought to diversify its business and acquired notable brands around the world, such as Chipotle Mexican Grill, Aroma Café, Boston Market and Donatos Pizza. Nonetheless, the company had, by 2008, made divestitures in almost all those and other companies, focusing instead on strengthening and promoting its own brand. The company is one of the largest private employers in the world, and in addition to its trademark hamburgers, it has in its menu a wide variety of value-priced products. McDonald’s has adapted brilliantly to the needs of the modern-day ‘eater’, incorporating healthy products as well as efficient home delivery services. The company went public in 1965 and is listed on the NYSE where it trades under the ticker symbol MCD. It falls in the Consumer Cyclicals sector, under the Restaurants industry.
There were 10 splits for the McDonald’s stock before 1990, a representation of a period where the company experienced phenomenal growth. Since then (up till September 2020), there have only been 2 splits as follows: a 2-for-1 on June 7th, 1994; and a 2-for-1 on February 12th, 1999. In the early years, McDonald’s sought to split when its stock was about to hit triple digits, with the company keen to remain attractive in the retail investment community. With discount brokers available nowadays, the company may see no need to place a stock split on its menu.
Adjusted for splits, the McDonald’s stock rose from a price of circa $1 to trade at circa $50 towards the end of 1999. The turn of the millennium saw the stock retrace its multi-year gains, bottoming out at circa $13 by February 2003. Since then, the stock has drifted higher and higher, printing an all-time high at circa $225 in September 2020. McDonald’s operates a cash flow heavy business and has over the years been one of the consistent biggest payers of dividends. In fact, McDonald’s has, at one time, been named as one of the S&P 500’s ‘dividends aristocrats’.
McDonald’s has often been one of the most attractive stocks on Wall st. Here are some of the factors to consider when trading the stock:
Here is why you should consider trading the McDonald’s stock with AvaTrade ZA:
McDonald’s is the largest fast food company in the world, and one of the most recognizable brands in the world as well. No matter where you go you are almost certain to be able to find a McDonald’s restaurant nearby. The stock is also quite popular among traders, with millions of stocks exchanging hands on a daily basis. That popularity gives the stock great liquidity, and enough price action for any trader to potentially profit from a trading strategy centred around McDonald’s stocks. If you want a way to trade on the restaurant sector McDonald’s is one of the largest and best-known stocks to trade.
With so many different restaurant stocks available, and market conditions always changing, the best restaurant stock for traders is also always changing. Oftentimes some newsworthy event is the catalyst that sparks a rally or a drop in stocks, and can determine the best restaurant stock for trading. Other times it is the trends and growth in one company over the other. However, through it all McDonald’s has been a solid choice for traders, with an uptrend in stocks that’s lasted for nearly two decades. That may not make it the best, but McDonald’s sure is a good restaurant stock for all types of traders.
Because McDonald’s stocks have been in an uptrend for almost 20 years the best strategy has obviously been a trend following strategy that looks to buy when the stock is experiencing some troubles. Any pullback in stocks or dips on poor quarterly earnings has proven to be a good chance to buy McDonald’s stock at a lower level in preparation for later gains. Because there have also been periods of consolidation in the stock a breakout strategy can also work well when you notice stocks turning sideways for several weeks or months.