McDonald's Corporation (MCD): Today's Featured Leisure Laggard

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

McDonald's Corporation ( MCD) pushed the Leisure industry lower today making it today's featured Leisure laggard. The industry as a whole closed the day up 0.4%. By the end of trading, McDonald's Corporation fell $1.21 (-1.2%) to $97.07 on heavy volume. Throughout the day, 7,965,171 shares of McDonald's Corporation exchanged hands as compared to its average daily volume of 4,879,700 shares. The stock ranged in price between $96.79-$98.59 after having opened the day at $98.42 as compared to the previous trading day's close of $98.28. Other companies within the Leisure industry that declined today were: Flanigan's ( BDL), down 5.0%, Dover Downs Gaming & Entertainment ( DDE), down 4.5%, Asia Entertainment & Resources ( AERL), down 4.5% and Cosi ( COSI), down 4.4%.
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McDonald's Corporation franchises and operates McDonald's restaurants in the United States, Europe, the Asia/Pacific, the Middle East, Africa, Canada, and Latin America. Its restaurants offer various food items, soft drinks, coffee, and other beverages, as well as breakfast menus. McDonald's Corporation has a market cap of $101.5 billion and is part of the services sector. The company has a P/E ratio of 18.8, above the S&P 500 P/E ratio of 17.7. Shares are up 14.8% year to date as of the close of trading on Wednesday. Currently there are 14 analysts that rate McDonald's Corporation a buy, no analysts rate it a sell, and 9 rate it a hold.

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, growth in earnings per share, increase in net income and increase in stock price during the past year. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

On the positive front, Orbitz Worldwide ( OWW), down 5.8%, Krispy Kreme Doughnuts ( KKD), down 5.5%, Empire Resorts ( NYNY), down 4.9% and Pizza Inn Holdings ( PZZI), down 4.8% , were all gainers within the leisure industry with Carnival Corporation ( CCL) being today's featured leisure industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the leisure industry could consider PowerShares Dynamic Leisure&Entert ( PEJ) while those bearish on the leisure industry could consider ProShares Ultra Sht Consumer Services ( SCC).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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