A company that I would choose to invest in is McDonald’s because I like companies that are the very best in their industries, and McDonald’s is by far the biggest fast-food chain in the United States by sales.
It has an annual revenue that is almost double of its closest competitor, Starbucks. In addition, it is also the most valuable fast food brand in the world, with a market cap of $168 billion. I also like less risky, more balanced companies and McDonald’s has a great balance sheet and has been increasing the dividend year after year since 1977.
In 2021, the yearly dividend yield is 2.29%. McDonald’s was affected by the pandemic, but after everything returns to normal, their revenue is bound to shoot up. In addition, McDonald’s ability to find great marketing opportunities is very eye-catching and promising.
Over the past year, they landed a partnership with rapper Travis Scott, which drastically increased sales to the point where they couldn’t even meet demand. McDonald’s reported that September, the month that they had the partnership, was their best month in sales for almost a decade. Lastly, revenue, cash flow from operations and earnings per share have been growing consistently and are expected to continue growing.
Although the pandemic did cause sales to crash, sales are bouncing back quickly and because McDonald’s is a low-cost dining option, they have fewer social distancing hurdles than other types of high-traffic businesses and can rebound much quicker than other companies in the entire service economy.
Coming out of the pandemic, McDonald’s can use the crisis to expand their revenue and grab market shares from rival companies like Burger King and Wendy’s.
All in all, because McDonald’s is the most recognizable name in the business, even on a bad day, they will still outsell any competitors with ease. I believe in their business model and effective marketing strategies, which makes me think that McDonald’s is a great company to invest in.