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McDonald's No Longer Overcooked

In terms of outlook, it doesn't seem as if analysts are expecting much improvement as Q4 estimates have fallen from $1.59 per share to $1.54. Likewise full-year projections have moved down to $5.55 from $5.71 over the past three months. But statements by the company seem to support the less than rosy view. During the announcement, Don Thompson, the company's CEO offered the following:

While our sales momentum and current financial results reflect today's challenging conditions, we continue to see significant long-term opportunities for brand McDonald's and remain confident in the underlying strength of our business model.

We expect near-term top- and bottom-line growth to remain pressured as we focus on driving guest traffic and market share by leveraging our strategies and competitive advantages in response to the global economic, operating and competitive challenges. As we begin fourth quarter, October's global comparable sales are currently trending negative.

Bottom Line

Earnings were not spectacular and outlook is uninspiring, but so what. This is not a stock for one quarter or even one fiscal calendar. McDonald's will overcome this near-term turbulence and regain its dominant form. The company is unparalleled when it comes to strategic pricing and outside-the-box thinking.

With the stock having suffered a pullback of late, I would be a buyer here at current levels. The company still has a strong balance sheet and margins will improve. In the meantime, investors with patience will enjoy a stable brand that offers one of the best dividend yields on the market.

At the time of publication, the author held no position in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Saintvilus is a private investor with an information technology and engineering background and has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.
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