McDonald’s Corporation (MCD): Overpriced Dining

Performance

Over the past five years, each of these companies has performed significantly better than the S&P 500, which is up 23%. McDonald’s is up 70% since then, while Panera Bread Co (NASDAQ:PNRA) and Chipotle Mexican Grill, Inc. (NYSE:CMG) have soared 291% and 306% respectively. From June through mid-October of 2012, Chipotle fell dramatically, causing its stock to drop over 11% in the past year. However, if we look at the chart below, we will see how well these companies have performed in comparison to the S&P 500 since the beginning of the year.

CMG data by YCharts

While these are all nice returns YTD, most bargain-seeking investors would not be willing to buy in due to the expensive valuations.

The Foolish bottom line

Now I understand, most people don’t consider any of these restaurants “fine dining” premieres, but they are certainly more expensive than they appear. Yes, they have given solid returns and McDonald’s Corporation (NYSE:MCD) has a phenomenal history of dividends, but if you are looking for a bargain, you might want to shop around. They are all great companies, but as of right now they are pretty pricey.

The article Overpriced Dining originally appeared on Fool.com and is written by Tyler Wofford.

Tyler Wofford has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill, McDonald’s, and Panera Bread. The Motley Fool owns shares of Chipotle Mexican Grill, McDonald’s, and Panera Bread. Tyler is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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