Dow Today: McDonald's Corporation (MCD) Lower

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

The Dow Jones Industrial Average ( ^DJI) is trading down 45.0 points (-0.3%) at 13,058 as of Friday, Oct 26, 2012, 12:35 p.m. ET. During this time, 254.8 million shares of the 30 Dow components have changed hands vs. an average daily trading volume of 565.8 million. The NYSE advances/declines ratio sits at 825 issues advancing vs. 2,083 declining with 121 unchanged.
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Holding back the Dow today is McDonald's Corporation (NYSE: MCD), which is lagging the broader Dow index with a 64-cent decline (-0.7%) bringing the stock to $86.69. This single loss is lowering the Dow Jones Industrial Average by 4.84 points or roughly accounting for 10.8% of the Dow's overall loss. Volume for McDonald's Corporation currently sits at 3.4 million shares traded vs. an average daily trading volume of 5.5 million shares.

McDonald's Corporation has a market cap of $88.02 billion and is part of the services sector and leisure industry. Shares are down 13% year to date as of Thursday's close. The stock's dividend yield sits at 3.5%.

McDonald's Corporation franchises and operates McDonald's restaurants in the global restaurant industry. Its restaurants offer various food items, soft drinks, coffee, and other beverages. The company has a P/E ratio of 16.4, equal to the average leisure industry P/E ratio and below the S&P 500 P/E ratio of 17.7.

TheStreet Ratings rates McDonald's Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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