Markets in Focus: What is McDonald's

Investing Strategy
June 12, 2024
Every week we provide insights into popular assets and hot questions, so you can easily learn more about the investment market in bite-sized pieces.

In this edition of Markets in Focus, we delve into McDonald's Food and Real Estate.

Take a look below or see a short video here:

What is McDonald's

McDonald’s Corporation is a global powerhouse in the fast-food industry, recognized for its iconic golden arches and widespread presence. Founded in 1940 by Richard and Maurice McDonald as a simple hamburger stand, the company revolutionized the food service industry with the introduction of the 'Speedee Service System,' a pioneering model for quick-service restaurants. 

The real transformative growth began under the leadership of Ray Kroc, who joined as a franchise agent in 1955 and later acquired the company. Under Kroc’s vision, McDonald’s expanded rapidly, both domestically and internationally, and now operates over 38,000 locations in more than 100 countries. This extensive footprint underscores McDonald’s status not only as a fast-food giant but also as a significant player in the real estate sector.

Is McDonald’s a real estate company

A key aspect of McDonald's business strategy is its real estate operations. The corporation owns a considerable portion of the land and buildings used by its restaurants, which are often situated in prime, high-traffic locations. 

This ownership model provides McDonald's with a stable and substantial revenue stream from leasing properties to franchisees, making it one of the largest commercial real estate owners globally. This approach not only secures long-term rental income but also ensures control over operational standards and strategic initiatives. 

The real estate assets enhance McDonald’s financial stability, contributing to a robust balance sheet that underpins the company's resilience against market fluctuations.

How is McDonald’s stock performing

In terms of stock performance, McDonald’s has consistently been a strong performer on the New York Stock Exchange (NYSE) under the ticker symbol MCD. Known for its reliable dividend payouts and steady appreciation, McDonald’s stock is a favorite among income-focused and long-term investors.

The combination of a solid real estate foundation, innovative business strategies, and a strong financial track record makes McDonald’s a compelling investment, showcasing its enduring appeal and strategic acumen in both the fast-food and real estate markets.

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Bon appétit!