2. McDonald’s Corporation (NYSE:MCD)
TTM Net Income: $8.24 Billion
5-Year Net Income CAGR: 7.04%
Number of Hedge Fund Holders: 60
McDonald’s Corporation (NYSE:MCD) is an American multinational fast food chain that ranks among the most profitable food stocks to invest in. With over 40,000 locations in more than 100 countries, it is one of the world’s largest food service brands. Around 95% of McDonald’s restaurants around the world are owned and operated by independent local business owners.
In the third quarter of 2024, McDonald’s Corporation (NYSE:MCD) reported consolidated revenues of nearly $6.9 billion, reflecting a 3% increase from the previous year. The company also reported that systemwide sales to loyalty members exceeded $28 billion over the trailing twelve-months, with nearly $8 billion generated in the quarter. This growth is driven by strong value offerings and menu innovations that resonate with customers.
The company has increased its quarterly cash dividend by 6% to $1.77 per share, demonstrating its commitment to returning value to shareholders. McDonald’s Corporation (NYSE:MCD) is focused on enhancing its value proposition in response to competitive pressures, introducing initiatives such as €4 Happy Meals in France, 3 for £3 in the UK, and C$1 coffee in Canada. These strategies aim to provide customers with affordable options while maintaining quality.
The company continues to invest in menu innovation, with plans to expand the McCrispy Chicken Sandwich to over 70 markets by the end of 2024. Additionally, McDonald’s Corporation’s (NYSE:MCD) pilot launch of the Big Arch burger in Portugal, Germany, and Canada has shown promising results, indicating strong consumer interest. The company is planning to work with franchisees and partners to deploy the Big Arch into more international markets in 2025.
Over the past five years, McDonald’s Corporation (NYSE:MCD) has achieved a compound annual growth rate (CAGR) of 4.22% in revenue and 7.04% in net income.
With its solid financial performance, commitment to innovation, and focus on delivering value, McDonald’s Corporation (NYSE:MCD) has positioned itself as a compelling investment opportunity in the food sector. The combination of consistent revenue growth and strategic initiatives makes MCD a strong candidate for investors looking for reliable food stocks.
As of the third quarter of 2024, McDonald’s Corporation (NYSE:MCD) was held by 60 hedge funds, according to Insider Monkey’s database. Carillon Tower Advisers stated the following regarding McDonald’s Corporation (NYSE:MCD) in its “Carillon Eagle Growth & Income Fund” third quarter 2024 investor letter:
“McDonald’s Corporation (NYSE:MCD) performed well as it met the expectations of investors looking for improvements in relative market share trends. The company’s introductions of menu items at premium- and medium-price tiers are picking up pace, allowing it to capture value more effectively.”
