#2 Worst Dow Stock: McDonald’s
Sector: Consumer Discretionary
Unlike HP, I actually have a lot of respect for the leadership at McDonald’s (NYSE:MCD). CEO Jim Skinner is one of the best CEOs in the Dow, and has been with Mickey D’s since 1971 in various capacities. Since he took over the corner office in 2004, the stock is up more than 260% — compared with a mere 21% gain in the market!
But McDonald’s simply outkicked its coverage in 2012, in my opinion. After being the best performer in the Dow Jones Industrial Average for calendar year 2011 with returns of about 29%, Wall Street was worried. Investors loved McDonald’s ability to continue to grow its already impressive earnings and heap on the dividends (currently a yield of about 3.2%) … and the MCD trade became a very crowded one.
In the first half of the year, as riskier bets like financials and technology came into favor, the money left McDonald’s stock. That has held back shares in the short term — but if past is precedent, the fast-food giant will fight back sometime soon.