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MCD Stock Is Better Than Most Others Out There!
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- čas přidán 14. 08. 2024
- McDonalds stocks (MCD Stocks) looks like a good business trading at a fair price. You should be rewarded well over the long-term. The only risk is valuation.
0:00 MCD Stock
0:47 Business
1:52 Earnings & PE
3:19 PE Ratio Risk
4:54 Investing
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Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks
@@PilouBen However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments.
@@lennoxmutterick6434 Oh please I’d love that. Thanks!
@@PilouBen Clementina Abate Russo is her name
Lookup with her name on the webpage.
MCD is perhaps my favorite stock of all time. It’s a qualified dividend that is a sneaky real estate play since they own the land under their restaurants.
Yes, I saw it in the great movie The Founder.
Hi Sven, thanks for hearing my biggest wish and making this video. Best CZcams channel!
My pleasure!
I go to a nearby MCD's 2-3 times a week, and always when I travel, for their coffee only. it's consistently good and a reasonable (low) price...Buffet & Munger too have talked about "would have/could have/should have" invested in MCD's (in hindsight), but did not, b/c they originally didn't think it had a competitive advantage over the other fast food restaurants. IMAO, it does and MCD's advantages over the others in the US, include their locations and how well the restaurants are managed and the employees trained - I always marvel at their consistent speed and efficiency at the drive-thru.... Outstanding analysis and insights as always, including the overview at 3:37. Thank you..
I'm not sure how coffee is in the US McDonalds, but coffee at McDonald's is awful in Poland. Maybe, they allow such quality because other places also serve poor coffee. Fun fact, they have a cool professional coffee machine in the house, but they use an automatic coffee machine. When I asked why they don't use professional coffee machines the answer was we don't have time for that...
Sure, it's much easier just to push one button instead of doing the whole coffee brew process...
Hi Sven, what do you think about the Drop of Carl Zeiss Meditec Stock, Is it a value chance?
I bought yesterday in Germany Big Mac Menu + one extra Big Mac = 16.5 eur. I say its a rip off. Mc Donalds will not see me in a long time, junk food+ expensive. The stock will fall even more.
but the rest of the population isn't as smart as yoU!
@3:58 According to ValueLine, MCD has 5-yr EPS & dividend growth rates of 8% and dividends are expected to grow by 8.5%.
So if MCD continues this trend through 2034, EPS would be $25.78 and dividends $13.45. 11 P/E would be $284/share with 4.74% dividend yield and 5.19% yield on cost (5.56% yield on Sven's $242).
Being paid over 5% yield to wait on the market bump up the valuation multiple on a stalwart like MCD doesn't seem like such a poor bargain.
Great point at the end of the video. I'm also thinking about the possibility of a valuation drop in the future. MCD has an ROC of around 20.
I looked at WMT between 2000 and 2010. WMT had a similar ROC at that time, around 20. Earnings per share were up, but the share price hasn't moved anywhere in ten years.
I have learned a lot concerning crypto progress this time and would like to join in. I wish I can get a good mentor
I think all you need is an expert assigned by a brokerage company that will trade for you and handle your capital professionally and give you weekly returns of investment without any extra fees attached.
Evelyn Turner is the professional that guides me and her optimal returns are really impressive
Yeah, I believe investing with a professional is the optimal approach, as it mitigates the risk of significant losses. Did you truly know her? I was under the impression that I was the sole beneficiary of her guidance through the challenges of trading.
Seeing a remark regarding my manager Evelyn Turner is quite energizing. It was just like this when I first met her a few weeks ago. Having started with just 4k about 2-3 weeks ago, I have already made it to 21 k. She is very remarkable!
Goodness gracious I'm so excited seeing Ms. Evelyn Turner been mentioned here also. Didn't know she has been good to other people too, this is wonderful because I also started with a CZcams referral like this
Best Channel on CZcams
Have you already checked the other 115 (?) million channels?
Respect!
@@sowhat8995 I’ve never learned as much, or enjoyed another channel, the way I have with Sven’s content.
@@chrisapplebach4756 I was just joking a bit about the exaggeration. I like this channel too.
@@sowhat8995 I mean, you are not wrong. I’m simple minded enough to have this claim of mine challenged by the right combination of cat videos. For instance, if an adorable cat were to have simply pawed at the Nvidia ticker symbol two years ago, and I was moved enough to have purchased lots of Nvidia, because it reminded me of that cute fluffy ball of fur, I would certainly be plugging a channel called “Meow Meow’s Weekly Blue Chip and Cat Nip Picks”. I would also be doing that from a newly purchased private plane, instead of a 22 year old Subaru.
This is by far the worst advice you can get anywhere. 2 percent inflation? please. He picks stocks below the 200 day with no volume. please. i am here purely for the comedy.
Another great and educational video from Sven. Thank you!
Hope you can check the Comcast stock - NASDAQ: CMCSA?
(-9.72%) past 5 years, P/E ratio -10.13. Div yield-3.25%.
A VALUE play?
here you go czcams.com/video/fuLCtyCZocI/video.html
@@Value-Investingwhat about cisco
Please have a look at Deere & Co … should be a potential buy at these levels.
John Deere has been volatile for the last 4-5 years
Sven, good point on the key risk- moving to a lower PE of 11 over time. Interesting to hear what can cause it considering that PE does not go down at current FED rates and likely direction of the rates is either down or stay the same (otherwise it will be hard for the US to service their debt)
Ok PE will not go down, then it will double again in 10 years! But with a real inflation rate of an average of 6-9% per annum it will be a loss.... :((( Better to buy it cheaper, then on the more expensive side (general rule) ;) ...or you have to hold it 20 years to be really happy with your investment. ;)
Thanks for the video Sven.
Nice and fair video, I really like your content! I think mcd is great for the large long portfolios. For me, I'm still way to early in my investing career, I can take much more volatility for a higher return, but eventually there will be a time for these kind of stocks.
Hi, I just found out about this channel and the frist video I saw was the Excel Template of valuation. I didnt understand the Terminal multiple can someone explainm how I calculate it?
here you go czcams.com/video/QMk-F_XwoDY/video.html
MCD is high risk for me at now see negative Equity ratio. So much long therm debt should be considering.
If they would value their property at fair Value. The debt would be in relation not high
@@sirogersiroger8835 thank for your viev but i dont feel comfortable at this stage now.
MCD value its property at “fair value”? MCD can sell their RE to pay off the debt? Isn’t RE already collateral for the debt, therefore accounted for?
What about EPS growth caused by over-leveraging the balance sheet with buybacks? Is the growth from this sustainable and to be projected? Not sure.
Many restaurants cies have inflated the liability side of their balance sheet to maximize div/buybacks in the last 8-10 yrs.
Add to that the taxation benefits starting from 2017 with Trump tax law. An increase back would reduce EPS and thus also impacts quite a lot the stock price.
McDonalds and great business, these words made me smile, ahahah, you are funny guy Sven
Nice Video, very informative ! I bought it 2 weeks ago and looking forward to stock it up at this price range from time to time. :)
Here in Argentina MCD it's quite expensive in comparison with other (much better) restaurants. But, anyway, I would eat a Big Mac at UD 3, and I would also buy MCD shares at a PE 10.
thx!
how does SBUX compare with MCD? lower stability, lower earnings growth for the following years?
Amazing explanation of how P/E and earnings work, thx Sven.
I think cheap fast food will always gain popularity during poor economic times. Especially with covid savings near gone and record credit card debt.
Isn't inflation incorporated into the growth of companies?
that is for sure, but you also have to look at organic growth, the number of new stores
Potentially a random question, but do you ever consider the implication of taxes on your returns? Since MCD is a US company, you'll obviously have to pay 10-30% witholding tax depending on your location (15% for me since I'm in the UK) and that'll eat into your dividend return over time. Arguably, not that much with MCD, but you get my point. Thanks for the videos! Long-time fan here :)
But then you don't pay UK taxes on them, so it evens out. Don't it? Or if you have it in a retirement account, you get it back, don't you? You have to invest in countries which have these kinds of international agreements and find out for yourself.
@@TheBooban yes, I don't pay UK taxes, but I pay US taxes and that's 15% taken straight off the bat, meaning a 2.5% yield ends up being 2.125% which isn't an astronomical difference, but does add up if you hold long-term. Given that Sven includes dividends in the total returns (as he should), I wonder if he considers those taxes. Obviously, there's no way around, but it could potentially turn 10% into 9% or so if the main source of returns is dividends
@@asdfasd95 well yes, but he can’t cover taxes for every country. Nobody anywhere reminds viewers of paying tax. You just have to pay it and figure it out. It’s not a factor when evaluating the actual stock. Btw, no, I don’t pay these taxes. Everyone has a special retirement account to not pay dividend tax. So no, no point bringing up taxes.
@@TheBooban I feel like you're completely missing my point, my friend :D I'm not asking him to cover taxes for every country, but rather does he consider them when he invests himself, hence why I was addressing him... Not to mention that the US charges all foreign investors with a witholding tax so this applies to basically anyone who is not a US resident...
@@asdfasd95 oh, that’s a personal calculation and I assume he does like everyone else. But since its the same no matter what you do, at least I, don’t think about it too much. Point is to just maximize whatever you can. And I’m not a US resident. But I don’t pay much of your taxes, It gets canceled out in the end. Sweden doesn’t have capital gains tax. We have some special stuff. I’ll tell you if you want to know. And I don’t think about forex too much either and that’s even more important. Taxes or exchange rate, I can’t do much about.
Edit: I just checked. I get 100% of US taxes back. Many countries make these deals.
Edit2: ah dividends are different. And its 16% or more! But i get 36-93% of it back. Luckily my BNS stock is Canadian so I get all of it back. If I bought the US one, the tax is 25% and I only get 60% of that back.
Nice analysis, thanks. So low risk but it could be not a great investment. Some predict a rotation from tech into stocks like this this year and since it is low risk anyway, would you agree that buying MCD is a great move?
Yes, it's a bit overvalued, but the business is so good with so much money from one of the most famous and successful brands... It's irresistible like its tasty, yummy food for many of us! So it's not the investment that will make you rich in a decade, but certainly, better than many others right now. Long with a small position. Thanks!
thanks for sharing
Solid company. The thing is, we can "only" expect a 10% annualized earnings growth (including dividends) for a PE Ratio of 22? We had Google under that ratio some months ago with forward expected earnings growth in the mid-teens.
It's true that the "safety" of this stock has kept its PE Ratio in a premium range, but this can change very quickly, as it happened with Starbucks. It might happen to Costco too. Who knows... I would not like to take that risk.
there is always the PE risk, can revert to 12 anytime
Nothing to add? They're sitting on a 37B debt pile and nutrition trends and consumer behavior is changing!
their numbers don't show changing trends
What is your opinion about Nomad Foods? Price to FCF around 8 or 8,5
Great Video Sven. Can you please do one for brookfield asset management (BAM)? It looks like a solid interesting business with good dividend growth.
10% returns dont even equal inflation and capital gains taxes for me 😢 i want 100% a year returns
Go for it
Thanks for the video 👍🏻
McDonald’s and fast food sucks now. Quality and portion size has noticeably decreased while prices have inflated too much and are bridging the price gap with sit down restaurants
The kids that take their parents in there don’t care about the quality of the food. It’s all about the Marketing
@@_mklein it’s not sustainable
Mc Donalds with 5% Dividend. Would Sell everything and live from the dividend
Why you don't care about the debt of Mcd?
good point!
Stop giving away my ideas 😂 I noticed them at quite a fair price about a month or two ago. Starting to build a position but can’t do it well enough if you tell everyone about it 😅
:-)))))
McDonald’s is a money factory! That’s all!
Hi Sven, Shouldn't you value Mcd based on FCF? why did u value using EPS? thanks.
no difference,
Great video Sven! 😊
Will you explain why multiplying the PE to the EPS results in the stock price?
Or maybe if you are in a very kind mood, make an entire video about it? 😅
Because P/E ratio is price of share divided by earnings per share.
Price to earning ratio
P/E=20 20*E=P
Hello, i am italian and all i can say is that mc donalds quality is soooo disappointing for me! Every time i go there i really cant believe how ridiculus are the ingredients in my burger: no salad, no tomato, no onions... Just a burger a tiny slice of bacon and maybe some sauce and a few pickles: wtf. Honestly mc donalds is everywhere and they can provide you with a quick standardized meal but i really dont understand how they can do that with such bad products... They arent even cheaper than other fast foods!!! I don't know how to analyze a business but how can you invest in such a disappointing experience
Don't go. 😅
Like Sven says, McD is a habit. And in the US they hook the kids. Kids don't want or need salad. Parents are a captive audience. It works.
Of course, you are from Italy
What timing..i bought last week $250
thanks for sharing!
Ambev any good seven
But my favourite stock of choice is weatherspoons 😊 and I also hold n91 div 7% and management but stock like drunken soldiers 😮
good comments. thx Sven.
I'm honestly surprised. I go to Mc maybe 3 times a month. There has NEVER been the same workers there. Wonder how they deal with the turnaround rate
It's partially because they hire lots of part time workers which tends to cycle in and out frequently.
What if the market stays high until past the election?
anything can happen!
Can you revisit Eurofins stock after Muddy Waters report? Is this short term noise?
Who will buy if there are such reports?
Would love to see your update on SAP ☺️
Sven
PDD
Growth+value!
AMAZON 2 TRILLLIOOOONNNN. RIDE THE BULLLLLLL
thanks for sharing
Hey Sven, what do you think about the negative equity in the balance sheet of MCD?
that is due to buybacks and asset light business model
the cash flows are key!
Extremely disagree. You should know the audience and politics behind the brand.
1- The people who go to McDonalds are expecting delicious cheap food. However, it’s not cheap anymore.
2.if you are up to date with politics you will see that a lot of people are boycotting McDonalds especially in the middle east.
I, myself as a middle eastern have seen a huge drop in audience in McDonalds and people are now used to NOT eating it and found another local/different alternative.
I can’t in good conscience invest in this company due to how terrible the product is.
thanks for sharing!
100% agree. Ultraprocessed food is crap.
U sadly have not understood what this is about
Anyone that has eaten lately in MCD knows that this company is in serious troubles. Quality drastic drop, poor choice compared with competence and skyrocketing prices. Formula for disaster.
It roughly the same as 10 years ago. This is nonsense.
And still F U L L
🗽 I do not understand the negative equity in the MCD balance sheet. ....same with SBUX.
.
Buybacks.
@@mariof1468 You mean they give out again more shares, if they need more money, more equity ??
If profits double stock price will not stay more or less stable. Market will react
yes, if the valuations doesn't change!
Can McD raise prices at least equal to their suppliers raising costs?
Yes
I will start accumulating my position once it goes under $1. Get ready for an epic collapse.
thanks for sharing
If McDonalds goes to a P/E of 10 Ill sell my soul
How much? 🙋
Waiting for NVDA to drop to P/E of 10 before I sell my soul
@@Pizza-gb1ch Just enough to buy 1 share
Nominal revenue is where is was 15 years ago, on a real basis sales are down substantially in that time. So this is not a growing business. It sells for 7X (and recently almost 10X) sales, which is insane and therefor it depends on very high margins to stay elevated to eke out any yield from a purchase at this price ... and that is where returns have come from - operating margins have expanded to 46% - and the rest of the return has come from multiple expansion and buybacks ... and thus, given that it would be a stretch to imagine margins could get much better, and price multiples are already very elevated, and sales are not growing much, even on a nominal basis - your only source of return in MCD would have to come from buybacks. And so, the yield on buybacks at the current price would be 4.5%, less than you can get in risk-free t-bills, and with a lot of downside risk, if margins or multiples contract.
Wrong, they are owning less and franchising more! Thus revenues go down, profits up
I am invested in Arcos Dorados $ARCO Maybe more geopolitical risk but way cheaper and more growth
McDonald’s Coffee 🚀
🇨🇦
:-) the value investor's coffee
5 years I am entering in mac and say to myself they know how to invest money
:-)
S&p 500 gives 12%❤
great for you!
It will not continue expanding, it has peaked already good business but it is boring and no growth and taking that into perspective it is expensive, div too small
VERY INTERESTING !!
Thank you for sharing this video, much appreciated!
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, I have a 3 fund portfolio consisting of 33% S&P, 33% Total stock, and 33% international. I feel a need to focus on complete growth so I went 100% stocks, but does the SP500 and TSM overlap too much to make sense holding both
ALSO most importantly, Thank you sir TOMAS CALEZ ANTONIO , for introducing me to YOUR platform since I joined this your trading network I have got back all the funds I lose from other platform and still gaining my profits off the market trends, thank you I really appreciate it.
it's near impossible to not out-perform the market hassles, been using my advisor for over 3years+ and I've netted a good reasonable amount of profits
thanks!
Hey Sven are you still personally investing?
always!
“Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than in the corrections themselves.”
Funny I can see the mcdonalds symbol in the graph 😄
:-)
Just my two cents, travel a fair bit with work, many an airport/train station/high street around Europe and the like.
You NEVER see an empty Maccys...ever. plenty an empty Burger King and the ilk...but never the Maccys.
Nevermind the local politics, situation, "GDP", etc
People need their Maccys, full stop. That's the advantage they have over companies such as Starbucks, people get hungry, period, AND they are addicted to the sugar/fat/tastyness/etc
Also, their business model is almost cruel (owning the land, shifting the risk to the "owner", etc)
Could there be a naff period where people only go to Maccys once a week as opposed to now, definitely. Could they trim all the restaurants that aren't making absolute bank, yes.
Will people stop shovelling the nuggies into their face, no...they simply will not.
The only thing I've ever seen (please batter me on this if I'm way off the mark), is the debt they're carrying.
They are a "cheeky REIT" that doesn't have to pay the divs in my opinion, if they can manage this, then just buy a share every month when you keep seeing the queues...in my opinion.
Love the vids Sven, keep em coming 👌
Dropped today
thanks for sharing
In Deutschland nennt man das Milchmädchenrechnung
but ozempic may kill it
I am a big fan of MCD but I am surprised they did not go bankrupt a long time ago ... 🙂
why...
@@Value-Investing According to Warren's teaching you gotta understand the product of the business you "own". As a long time MCD share holder - it's the worst burger you can buy.
I bet 99% of the audience here can agree ... 🙂
@@johnmoser1162You need learn basic logic first before you say “I bet”
@@StonkManOMGOMG I have a masters degree from a top university ... can you match with your "logic" ... 🙂
@@johnmoser1162 looks like your school time is such waste. Give me proof of “99%” in your statement
No comment to the balance sheet? These huge Treasury stocks are a big issue for me. I would never buy a company with negative equity capital.
Buy backs are a good thing for you… look past the negative equity and realize this company is making so much money that it can not only increase its dividend but also increase your ownership in the company every year
@@bewagoon7446 sometimes you are right, If buybacks are done when share price ist los, but MCD buys shares at high prices. This is bad financial engeneering.
Where will McDonalds grow to? China? Russia? Near East? Africa? Are you kidding me?
thanks for sharing!
Just was today @ MCD and was reminded that it is the worst sht food there is out there...
but you were there
anyone here like paying 25bucks for a burger ?
No going back now. That's the way it is from now on. It'll probably will get even worse.
A shit quality burger at that
Sven, you always take the time to point out fat or lazy people and here you are talking about Mcdonald's lol. But back to what matters, thank you for your data point/analysis it is still a no for me.
as said, I am also a bit fat, but not going to mcd. We all have to work on that!!!
Totally off mark
Eurofins!
read the Muddywaters report
MCD IS COMPLICIT IN GENOCIDE. I WILL NEVER BUY THIS STOCK
thanks for sharing
How are they doing genocide? I don't get it. @@Value-Investing
Boycott it please
Imagine if you had bought 1000 MCD shares at 19USD back in 2003...