McDonald's (MCD) Stock Down on Salt Warning Rule - TheStreet

NEW YORK (TheStreet) -- McDonald's Corp. (MCD) - Get Report  shares are retreating 0.13% to $114.08 on Monday as fast food restaurants in New York City are required to put a salt shaker warning label on high-sodium foods. 

The new requirement will go into effect on Tuesday and New York City is the first city in the U.S. to take this initiative in an effort to battle heart disease and stroke, Reuters reports.

Restaurants with at least 15 other establishments must follow this rule. 

Since the recommended daily salt intake is 2,300 milligrams, restaurants that offer products over this limit are required to put a salt shaker symbol in a black triangle next to the food item on the menu. 

Currently, cardiovascular disease is the leading cause of death in New York City, affecting about 17,000 lives in 2013. 

Based in Oak Brook, IL, McDonald's operates and franchises McDonald's restaurants in the U.S., Europe, the Asia/Pacific, the Middle East, Africa, Canada, and Latin America.

Separately, TheStreet Ratings team rates MCDONALD'S CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate MCDONALD'S CORP (MCD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, notable return on equity, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Hotels, Restaurants & Leisure industry average. The net income increased by 22.5% when compared to the same quarter one year prior, going from $1,068.40 million to $1,309.20 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, MCDONALD'S CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 45.03% is the gross profit margin for MCDONALD'S CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.79% is above that of the industry average.
  • Net operating cash flow has slightly increased to $1,947.40 million or 6.24% when compared to the same quarter last year. Despite an increase in cash flow, MCDONALD'S CORP's average is still marginally south of the industry average growth rate of 7.11%.
  • You can view the full analysis from the report here: MCD