McDonald's
MCD Large CapConsumer Cyclical · Restaurants
Updated: May 20, 2026, 22:09 UTC
Key Metrics
Valuation Analysis
About the Company
McDonald's Corporation owns, operates, and franchises restaurants under the McDonald's brand in the United States and internationally. It offers food and beverages, including hamburgers and cheeseburgers, various chicken sandwiches, fries, shakes, frozen desserts, sundaes, soft serve cones, cookies, pies, soft drinks, coffee, and other beverages; and full or limited breakfast, as well as sells various other products during limited-time promotions. The company owns and operates franchised restaurants under various structures, including conventional franchise, developmental license, or affiliate. McDonald's Corporation was founded in 1940 and is based in Chicago, Illinois.
McDonald's Stock at a Glance
McDonald's (MCD) is currently trading at $280.29 with a market capitalization of $199.1B. The trailing P/E ratio stands at 23.11x, with a forward P/E of 19.71x. The 52-week range spans from $271.98 to $341.75; the current price is 18% below the yearly high. Year-over-year revenue growth stands at +9.4%. The net profit margin stands at 31.62%.
💰 Dividend
McDonald's pays an annual dividend of $7.44 per share, representing a yield of 2.65%. The payout ratio stands at 59.85%.
📊 Analyst Rating
32 analysts rate McDonald's (MCD) on consensus: Buy. The average price target is $330.00, implying +17.74% from the current price. Analyst price targets range from $250.00 to $407.00.
Investment Thesis: Strengths & Weaknesses
- Profitable with 31.62% net margin
- High gross margin of 57.35% — indicates pricing power
- Analyst consensus: Buy
- Solid dividend yield of 2.65%
- Positive free cash flow
No significant red flags in current metrics.
Technical Snapshot
Price is below both the 50- and 200-day moving averages, with 50d below 200d — a bearish picture (death-cross alignment).
Risk Profile
The data points to relatively defensive market behavior.
Trading Data
💵 Dividend Info
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McDonald's 2026: Value menu, CosMc's pilot and the comeback plan
The Real Story
McDonald's enters 2026 with its first US same-store-sales decline since 2020. Q1/2026 shows -2.4% US comps — driven by significant trading-down by low-income consumers (households earning under $45k cut visits by 9%) and aggressive value moves by competitors (Wendy's $3 breakfast, Burger King $5 Meal Deal).
CEO Chris Kempczinski announced the biggest strategic reset since the "Plan to Win" era of 2003 in February 2026: permanent $5 Meal Deal bundle (predator burger + McNuggets + fries + drink), accelerating the CosMc's pilot (from 10 to 47 locations by year-end 2026) and a new digital loyalty push via direct Apple Pay / Google Pay integration.
What decides the story in 2026: McDonald's had to push through ~12% price increases in 2024-2025 to absorb wage inflation (California $20 minimum wage) and beef prices. The effect: 22% of former regulars now go to Wendy's, Chipotle and 7-Eleven. Kempczinski's main job: win back traffic without damaging margin.
What Smart Money Thinks
The Q1/2026 13F shows classic Dividend-Aristocrat holdings: Vanguard (8.9%), BlackRock (7.4%), State Street (4.2%) — all index funds. More interesting on the active side: Ariel Investments (John Rogers) increased its MCD position by 18% in Q4/2025 to 1.4M shares — classic value-contrarian trade after the 22% drawdown from ATH.
Bill Ackman (Pershing Square) in February 2026 took his first material MCD position (8.3M shares, ~$2.2B). In his Q4 investor letter he argued: "Rarely a compounder with an 8% comp-decline already priced in at a 24× forward multiple and a 96% franchise model." The position was built in February after Q4 earnings.
Insider activity (Form 4): CEO Kempczinski bought 5,000 shares in March 2026 at $278 (open-market purchase, no 10b5-1) — the first insider buy by an MCD CEO since 2019. A notable signal to Wall Street.
Explore the BMI Smart-Money Tracker →
📈 The 3 Real Bull Points
96% of all 41,800 McDonald's locations are operated by franchisees. That means McDonald's itself only carries 4% of direct cost-inflation risk, while collecting 4-5% royalty plus rent income. Operating margin therefore stands at 45.8% — highest in the global QSR segment. Even at -3% comps, EBIT stays relatively stable.
When Wendy's launched its $3 breakfast (2023), it gained an 8% frequency boost in 6 months. McDonald's $5 Meal Deal (launched March 2026, permanent) is the largest value move since 2020. Early data (April 2026): foot-traffic in pilot markets +4.1% vs. prior-year April. If this scales, the comp turn comes faster than Wall Street expects.
McDonald's has raised its dividend every year since 1976 — currently $7.08 annualized, yield 2.5%. With a payout ratio of 56% of free cash flow ($8.4B FCF 2025), the dividend is covered. At prices above $280, the yield sits below the 10-year median (2.3%), but growth at 7-9% per year remains reliable.
📉 The 3 Real Bear Points
33% of former US regulars with household income below $45k are going to McDonald's less in 2026. Competition (Wendy's, Burger King, 7-Eleven) is aggressive, and the wage-inflation catch-up plus McDonald's own pricing moves have damaged its 'cheap' image. Even with the $5 meal, maybe only 30-40% of lost customers come back.
McDonald's holds 28% of the China operation (CITIC Capital 52%, Carlyle 20%). Q1/2026 China comps: -6%. By contrast, Yum China (KFC, Pizza Hut, Taco Bell) grows +2%. The Chinese casual-dining format is in transition — McDonald's has no clear differentiation asset there against local players like Mixue or Luckin Coffee.
McDonald's will invest $3.8B in 2026 (vs. $2.9B in 2024) — driven by "Accelerating the Arches" restaurant refresh (5,000 locations modernized) and CosMc's rollout. Free cash flow yield is therefore temporarily compressed to 4.8% — historically more like 6%+. If the comp turn doesn't happen in 2026, dividend coverage gets tight.
Valuation in Context
McDonald's trades at a forward P/E of 24.8× — slightly above the 10-year median (22.4×), but below the AAA QSR peer multiple (Chipotle 52×, Starbucks 26×). EV/EBITDA at 17.1× is in normal range. A DCF (10y FCF growth 5.5%, terminal 3%, WACC 7.5%) suggests fair value of $290-$310 — slightly above spot $285. Wall Street consensus sits at $300 (median, range $255 Wells Fargo to $360 Bernstein, who models a more aggressive comp turn). Valuation is not cheap, but appropriate for a compounder with 45%+ operating margin.
🗓️ Next 3 Catalyst Dates
- July 31, 2026: Q2/2026 earnings — first full quarterly data point after $5 Meal Deal rollout, critical for US comp-turn thesis
- September 2026: Investor Day in Chicago — new 5-year targets for restaurant count, margins and CosMc's scale plan
- Q4 2026: CosMc's after 47 locations decision point — scale to 500 stores or pilot wind-down
💬 Daniel's Take
McDonald's is one of those 'boring compounder with short-term stress' setups where the multi-year total-return driver (3% dividend + 7% EPS growth + 1% multiple expansion) is likely intact — but 2026 will be a tough year. I've held MCD as a 1.8% position since 2019 and only add at clear trigger points: when US comps turn positive again (earliest Q3/2026 after $5 meal data) OR if the price falls below $260 (about 22× forward, historically attractive). At today's $285 I hold but don't actively add.
Sources (3)
Disclaimer: This article is not investment advice. Investing in stocks carries risks, including total loss.
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