Amazing operation margin for McDonald’s with attractive dividend
Below is the stock price of McDonald’s that I love.
It is a beautiful upward slope.
The important thing here is that in late 2018, stock prices of companies such as Amazon and Google fell across the board, but McDonald’s had no effect.
I feel the strength of McDonald’s here.
It’s a defensive stock.
The stock price has risen recently, and the PER has become quite high at 35.
The dividend is also reasonable at 2.3%.
Below are McDonald’s sales and profits.
Sales are declining because we are gradually switching from directly managed to franchises.
Therefore, there is no problem with sales.
Profit is also very stable and growth is seen.
The profit margin is a whopping 43%!
As far as I know, this is the profit margin following VISA’s profit margin of 62%.
McDonald’s is not currently making a profit by actually selling hamburgers, but providing information on how to make and manage hamburgers to franchise stores, and in return they are getting information fees.
Specifically, McDonald’s in Japan pays 3% as a royalty for the total sales of stores.
In addition to this, you will also pay 4.5% of advertising expenses.
In other words, it is not just a restaurant, but rather a business model similar to Google in the sense that it provides information and makes a profit.
The future of McDonald’s
McDonald’s is working to expand sales at existing stores through the following partnership with Uber.
Click here for McDonald’s Investor Presentation.
In addition, we have not neglected to develop the menu to compete with new hamburgers such as Shake Shack.
(I want to eat it. ^^)
In my last post on US stock prices, I mentioned the number of McDonald’s stores in China and India, but I would like to revisit it here.
As shown below, the number of stores in China and India is still small compared to the number of stores in the United States.
In China, we plan to increase the number of stores by 2000 to 4,500 by 2022.
For this reason, it is expected to increase at least as many stores in the United States.
There is still an engine of growth. It’s a McCafé and home coffee shop.
McCafé has surpassed Starbucks in Canada to become number one in its favorite coffee shop.
In Malaysia, we continue to open up to 15 stores a year.
As mentioned above, McDonald’s profits can still be expected.