1. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 67
Topping the list of 10 best coffee stocks to invest in is American fast food company McDonald’s Corporation (NYSE:MCD). The Illinois-based leading foodservice retailer was founded in 1940 and has over 31,000 restaurants located in 119 countries. McDonald’s Corporation (NYSE:MCD) is one of the best coffee stocks to invest in with over 15,000 McCafe outlets worldwide.
In 2019, McDonald’s Corporation (NYSE:MCD) acquired AI-company Apprente. The acquisition supports the company’s customer experience by bolstering its digital, drive-thru, and delivery offerings.
On August 3rd, RBC Capital analyst Christopher Carril raised McDonald’s Corporation (NYSE:MCD) price target to $268 from $263 and kept his Outperform rating on the stock, highlighting the company’s positive Q2 results. The stock has gained 23% in the last twelve months. Shares of MCD also increased 11% in the year to date.
The company has a market cap of $179.16 billion and currently offers a dividend yield of 2.15%. In the second quarter of 2021, McDonald’s Corporation (NYSE:MCD) reported an adjusted EPS of $2.37, beating estimates by $0.26. The company’s second-quarter revenue was $5.89 billion, beating consensus estimates of $5.53 billion.
At the end of the first quarter of 2021, 67 hedge funds in the database of Insider Monkey held stakes worth $3.78 billion in McDonald’s Corporation (NYSE:MCD).
Horizon Kinetics LLC mentioned McDonald’s Corporation (NYSE:MCD) in its Q1 2021 investor letter. Here is what the fund said:
“We were asked about the attractiveness of some well-established, low-price-point restaurant chain, like McDonald’s. It would seem to be a high-quality name for maybe a consumer-income-constrained world. The share price had dropped in lock step with the S&P 500. The problem is that inflation isn’t evenly applied. If it were, if all prices and salaries and rents rose by the same percentage, it’s not a problem. But what if McDonald’s input costs, like wages and rents, as well as the prices it charges its customers, are all rising at a 6% annual rate, but suddenly the cost of beef rises by 12%; and the cost of corn syrup for soda? Food and packaging are roughly 30% of a fast food restaurant’s costs. That could seriously diminish profit margins.
A better business model for such an environment might be a food processor like Archer Daniels Midland. The country can’t exist without an ADM. It would be difficult to have a balanced dinner without some ADM product on your plate, whether it’s the vegetable oil in the salad dressing, the protein meal that fed the chicken, the wheat flour and yeast in your bread, the citric acid in the spice rub, or the probiotics in your health drink. The company has its own trucks, railroad cars, river barges and ocean-going vessels…” (Click here to see the full text)
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