McDonald’s (MCD) is the poster child of globalization, with big growth into overseas markets and a dominant brand as well as a dominant reach. Consider that Yum! Brands (YUM), Wendy’s (WEN) and Bugrer King (BKW) combined are still just worth half the market capitalization of McDonald’s!
But there’s more to investing than just size. And after a recent miss on both the top and bottom lines, it’s increasingly clear that MCD has headwinds to growth as it banks big on China consumers (which, by the way, haven’t materialized as hoped) and struggles amid weak consumer spending and a focus on healthier diets in the U.S.
Nobody is saying MCD will go bankrupt anytime soon, and there is assuredly a reason to buy-and-hold this investment for the long-haul based on the big dividend increases across the past decade.
But for the next year or so, it seems that underperformance is going to be the unfortunate reality at McDonald’s … so investors might be better served putting their money elsewhere.