Should You Add McDonald & # 39; s (NYSE: MCD) To Your Watch List Today?

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<p class = "Canvas-Atom Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Some have more money than sense, they say, even companies Investors who have no sales, profits and shortages can easily find investors, but as Peter Lynch said One up on Wall Street, & # 39; Long Shots almost never pay off. & # 39; "Data-reactid =" 27 "> Some have more money than it makes sense, so even companies that have no sales, no profit, and a record underfunding can easily find it. But as Peter Lynch said One up on Wall Street, & # 39; Long Shots almost never pay off. & # 39;

<p class = "Canvas-Atom Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "So if you're like me, you could be more profitable , growing companies will be interested in how MC Donalds (NYSE: MCD). While profit isn't necessarily a social good, it's easy to admire a company that can consistently produce it. While a well-financed company can suffer losses for years if its owners don't have an endless appetite to subsidize the customer, at some point it has to make a profit or take its last breath. "Data-reactid =" 28 "> So if you're like me, you might be more interested in profitable, growing companies like MC Donalds (NYSE: MCD). While profit isn't necessarily a social good, it's easy to admire a company that can consistently produce it. A well-financed company can suffer losses for years unless its owners have an inexhaustible appetite for subsidizing the customer, but must eventually make a profit or keep their breath.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = " Check out our latest analysis for McDonald & # 39; s "data-reactid =" 29 "> Check out our latest analysis for McDonald & # 39; s

How fast is McDonald's growing?

As one of my mentors once told me, the share price follows earnings per share (EPS). Therefore, there are many investors who like to buy shares in companies whose earnings per share are growing. McDonald & # 39; s managed to increase EPS by 13% per year over a three-year period. This is a good growth rate if it can be maintained.

Careful consideration of sales growth and earnings before interest and taxes (EBIT) can provide information about the sustainability of recent earnings growth. McDonald & # 39; s appears to be fairly stable as sales and EBIT margins are fairly constant year-on-year. This is not a big problem, but it does not indicate the long-term growth we want to see.

The graphic below shows how the company's income statement has evolved over time. Click on the image for more details.

NYSE: MCD Income Statement, January 5, 2020

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "As in life, the future counts more than when investing the past, so why not take a look free Interactive visualization from McDonald’s forecast profits? "data-reactid =" 46 "> If you invest like in life, the future is more important than the past. Why shouldn't you look at it? free Interactive visualization from McDonald’s forecast Win?

Do McDonald & # 39; s insiders agree with all shareholders?

We would not expect insiders to own a large percentage of a $ 151 billion company like McDonald’s. However, we are reassured that they have invested in the company. Given that insiders currently have a small fortune in stocks currently valued at $ 71 million, they are very motivated to make the company a success. That is certainly enough to make me believe that management will be very focused on long-term growth.

It means a lot when insiders invest in the business, but I wonder if the compensation policy is shareholder-friendly. A brief analysis of CEO compensation suggests that this is the case. I have found that the average total compensation for CEOs of companies like McDonald’s with market cap over USD 8.0 billion is around USD 11 million.

The CEO of McDonald & # 39; s received only total compensation of USD 4.7 million for the fiscal year ended December 2018. This is clearly below average. At first glance, this regulation appears generous to the shareholders and indicates a modest compensation culture. The level of CEO compensation is not the most important measure for investors. However, if the remuneration is modest, it supports better coordination between the CEO and the ordinary shareholders. In general, this can also be a sign of good governance.

Is McDonalds worth keeping an eye on?

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "An important encouraging feature of McDonald & # 39; s is That It's Growing Profits The fact that EPS is growing is a real win for McDonald's, but the beautiful picture is getting better than that. With a significant level of insider participation and decent salaries for CEOs, a decent head might think so Conclude that this is a stock worth watching Once you have identified a company that you like, you need to consider what you think it is worth Discounted cash flow valuation from McDonald & # 39; s. You could benefit from taking a look today. "Data-reactid =" 52 "> An important, encouraging feature of McDonald’s is the increase in profits. The fact that the EPS is growing is a real benefit for McDonald’s, but the beautiful picture will Significantly better than that. With a significant amount of insider ownership and reasonable payment from the CEO, a reasonable mind could conclude that this is a stock to watch. Now you have ours McDonald’s exclusive discounted cash flow valuation, and you can take advantage of it by taking a look today.

<p class = "Canvas-Atom Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Although McDonald’s definitely good for me looks like i would do it i like it more when insiders buy shares, if you want to buy insiders this is free List of growing companies that buy insiderscould be exactly what you are looking for. "data-reactid =" 57 "> Although McDonald & # 39; s definitely looks good to me, I would like it more if insiders bought shares. If you also want to see insider purchases, then that free A list of growing companies that buy insiders might be just what you're looking for.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Please note that the insider transactions dealt with in this article relate to reportable transactions in the respective jurisdiction"data-reactid =" 58 ">Please note that the insider transactions dealt with in this article relate to reportable transactions in the respective jurisdiction

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "If you discover an error that justifies a correction, please contact the editorial team at editorial-team@simplywallst.com, This article from Simply Wall St is general in nature. It is not a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Simply Wall St has no position in the stocks mentioned.

We strive to provide you with long-term, focused research analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Thank you for reading."data-reactid =" 59 ">If you discover an error that justifies a correction, please contact the editorial team at editorial-team@simplywallst.com. This article from Simply Wall St is general in nature. It is not a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Simply Wall St has no position in the stocks mentioned.

We strive to provide you with long-term, focused research analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Thank you for reading.