Jim Cramer’s Top 10 Stocks to Track for Potential Growth

4. McDonald’s Corporation (NYSE:MCD)

Number of Hedge Fund Investors: 67

Jim Cramer discusses the concept of price versus value using McDonald’s Corporation (NYSE:MCD)’s recent decision to maintain their $5 deal as an example. He notes that while this may be relevant for McDonald’s Corporation (NYSE:MCD), it doesn’t necessarily apply to other businesses, particularly if they operate in different sectors. Cramer emphasizes that discounting alone isn’t a path to success.

“Now, let’s talk about the notion of price and value. Today, McDonald’s Corporation (NYSE:MCD)’s announced they’re keeping the $5 deal, but that’s not really the point. Are they even in the same business as you? I think we’re in a different business. You can’t discount your way to prosperity.

We want to focus on the guest experience and the total value proposition, including the quality of what we offer. We’ve seen consumers willing to pay a dollar or two more, sometimes even at parity with the recent accelerated price increases in fast food. They would rather have a fresh bowl of Mediterranean food than a traditional fast food meal.”

McDonald’s Corporation (NYSE:MCD) is a strong investment choice for 2024, thanks to its solid financial performance, strategic growth plans, and innovative customer engagement. Despite a small drop in comparable sales and some economic challenges, McDonald’s Corporation (NYSE:MCD)’s achieved around $6.5 billion in revenue for Q2 2024, showing it can maintain growth. McDonald’s Corporation (NYSE:MCD)’s “Accelerating the Arches” strategy focuses on menu innovation, digital upgrades, and competitive pricing, which supports its long-term potential.

A major growth driver is its McDonald’s Corporation (NYSE:MCD)’s Rewards loyalty program, which has rapidly expanded to over 150 million active members, enhancing customer retention. McDonald’s Corporation (NYSE:MCD)’s is also lowering prices to attract more customers and expanding popular menu items like chicken to stay ahead in the industry. With the stock valued at about 21 times forward earnings, McDonald’s Corporation (NYSE:MCD)’s growth plans, including expanding its global restaurant network through 2027, make it an attractive investment.

Carillon Eagle Growth & Income Fund stated the following regarding McDonald’s Corporation (NYSE:MCD) in its first quarter 2024 investor letter:

“McDonald’s Corporation (NYSE:MCD) faces several short-term headwinds. Lower-income consumers have been cautious with spending, as they are feeling the cumulative effects of inflation more than higher-income cohorts. As the low cost/ value player in fast food, McDonald’s has a customer base that skews lower income. Also, as an international company, McDonald’s is feeling negative effects from war and tensions in the Middle East, as well as softness in China.”