This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

How McDonald's Has Become Such A Market Force

By Xavier Brenner

McDonald’s (MCD) is such a steady performer year in and year out that it’s easy to take the company for granted. Yet the fast food giant definitely deserves its bluest of blue chip status. It’s a cash-generating machine that has returned billions to investors over the years via stock buybacks and steady dividends.

McDonald’s stock, up about 9% on the year through June 20, has lagged the broader market and many of its fast food peers this year. But it’s hard to argue with its long-term track record (see below) or future prospects.

MCD Chart

MCD data by YCharts

Even consumers who love fine dining appreciate what McDonald's has to offer. Chaitali Waychal, a self-described chef and insatiable gourmand, recently responded to the following  question on Quora: Why do people eat at McDonald’s?

Here’s his response:

I love McDonald's. I am a trained chef and a self-confessed food snob. Despite my education in one of the finest cooking schools in Paris and training in classical Michelin starred restaurants, I couldn't be happier chowing down a Big Mac meal with large fries.

And I'm definitely not alone. The kitchen crew, in one of the restaurants I worked at, would serve beautifully executed gastronomic meals to gourmets shelling out around 1000Euros  ($1350) for a dinner for two. After service, we would all traipse down to the nearest 'McDo' and have a late night snack while dissecting the extravagant menu we had just served up.

Here's why I think why millions of people frequent McDonald's while being fully aware of it's well-documented health and environmental hazards.

Comfort: It's comforting due to the fact that it's consistent in  quality. A BigMac or an order of chicken nuggets will taste similar in almost every McD in the world. When you just arrive in a new place and haven't had time to scope out the food scene, the options are usually a seedy local bistro which might try to pass off dishwater for French onion soup, (and charge you 20 bucks for it) or a cheap, tried and tested McDonald's. It's a lot more comforting to choose something familiar then try something scary and foreign.

Hours: McDonald's is open late, sometimes even 24H and generally on weekends. I cannot stress how incredibly convenient it is to have a place that serves hot food when everything else is closed. I found this to be especially in European countries where restaurants/general stores/cafes normally shut down on weekends.

Taste: Golden fried nuggets dunked in delicious BBQ sauce. Crispy fries showered liberally with salt and served piping hot; Deliciously sweet, effervescent Coke poured over ice cubes. Not only do they sound good, but taste good too! McDonald's very cleverly caters to the basic stimulants of Salt/Fat/Sugar. Once you start eating it, you become addicted to the heady combination.

Service: Say what you will, but McD has pretty good service. It may not always be friendly, but it's always rapid and efficient. And in some locations, you can simply order a burger off the dollar menu and mooch off the free WiFi for however long you wish.

Regarding the stock, consider the following:

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs