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Mcdonald's Financial Analysis The Beta Term Paper

The company is trading just off of its 52-week high and indeed is just off of its 10-year high. The market's growth assumptions are reasonable. China has not faced a strong economic downturn and is therefore going to continue to be a robust market for the company. Same store sales in April were up 4.9%, indicating that McDonalds' demand is coming out of the economic downturn. The company has been able to penetrate the Indian market, where it cannot market either beef or pork. Overcoming a challenge like that demonstrates that this company can continue to expand until it saturates the entire planet if it so desires.

The major international threat, Yum Brands, is expanding rapidly to build out market share but is highly leveraged. Because they do not compete directly in burgers, there is little need for McDonald's to expand too rapidly to keep up. Furthermore,...

The slow, steady growth strategy that McDonald's has employed is therefore likely to continue, which is consistent with the market expectation of growth as evidenced in the P/E ratio.
I recommend a hold for McDonald's. The company is a world leader in its field and despite intense competition has sources of sustainable competitive advantage that allow it to whether that competition. As a result, McDonalds will be able to sustain growth rates and profit margins for the foreseeable future. This will help the company to continue to not only improve its stock price but its dividend payout as well. While it is tempting to view McDonald's stock as at a peak and issue a sell order, it is more likely than over the long run this company will continue to grow. There…

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