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NEW YORK (TheStreet) -- McDonald's (MCD) - Get McDonald's Corporation Report stock is up 0.58% to $113.59 in mid-afternoon trading on Tuesday, after the company this afternoon announced at its investor meeting that it will not create a real estate investment trust.

The fast food chain said the financial and operational risks of a REIT spin-off outweighed the benefits, such as tax advantages.

"We have concluded that any potential value creation from a REIT is out-weighed by the significant financial and operational risks to our business and the continued progress of our turnaround, and we do not believe that pursuing a REIT would be in the best interest of McDonald's at this time," Chief Administration Officer Pete Bensen said in a statement.

McDonald's raised its re-franchising target to 4,000 restaurants from 3,500 as part of its goal to become 95% franchised.

Additionally, the fast food company raised its fourth quarter dividend by 5% to 89 cents per share and reiterated that it expects positive fourth quarter comparable sales.

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TheStreet Recommends

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. In addition, MCDONALD'S CORP has also modestly surpassed the industry average cash flow growth rate of 1.72%.
  • You can view the full analysis from the report here: MCD

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.