Last Updated: January 11, 2023
When the McDonald brothers founded their first restaurant in 1940, they probably couldn’t even dream what the future had in store. In 2021, the company became the most valuable fast-food restaurant brand worldwide, with an estimated value of $154.9 billion.
If this information is enough for you to entertain the idea of taking a stake in their corporate stock, this article can serve as your guide on how to buy McDonald’s stock. Below we will provide you with more information about the company, what to keep in mind when deciding whether or not to invest in McDonald’s shares, and advise you how to buy if you choose to do so.
About the Company
The first McDonald’s restaurant appeared in 1940 in California, founded and operated by the brothers Richard and Maurice McDonald, who pioneered the fast-food line production. However, the man responsible for franchising the business model and the McDonald’s we all know today is Ray Kroc. Though he initially came on board as a franchise agent in 1955, Kroc bought out the McDonald brothers in 1961. Not too long after the acquisition, in April 1965, the McDonald’s IPO was launched. At the time, the stock was priced at just $22.50 per share.
Since then, the company has gone a long way. Today, the McDonald’s corporation has more than 39,000 restaurants in over 119 countries. Looking into McDonald’s stock history, we can see that the corporation has executed 12 stock splits up to now – six 2 for 1 and six 3 for 2 splits. So, more than half of McDonald’s stock split in the first decade since going public.
Should You Buy McDonald’s Stock?
Dividend-oriented investors may find McDonald’s a good fit since the company is a Dividend Aristocrat. This title is given to S&P 500 compounders with at least 25 consecutive years of dividend increases. After announcing a 7% dividend raise in September 2021, McDonald’s marked an impressive 45-year growth streak. As of January 28, 2022, McDonald’s dividend payout was $5.52.
Moreover, McDonald’s latest financial report shows that the revenue in 2021 was $22.16 billion. This was a significant 6.9% improvement from the previous year. The $18.86 billion they made in 2020 represented a $2.21 billion decrease from their gains in 2019. The global COVID-19 pandemic is probably to blame for the decline. But considering the recent figures, it’s probably safe to assume that McDonald’s is undergoing a recovery on the COVID-hit markets.
While promising, this information alone should not be the only reason to invest in Mcdonald’s stock. Before making a final decision, make sure to consider the McDonald’s stock performance and how the company will fit into your portfolio.
McDonald’s stock performance
The value of Mcdonald’s stock these days is around $255 per share. But daily stock prices are volatile. For the past week, volatility for MCD stock has been 1.29%. The 52-week high of McDonald’s stock for 2021 was $268.49, while the 52 week-low was $201.487.
Many investors believe that if the current price is above the 52 week-high, the trend will continue in the future, but if it is less than the 52 week-low, the time has come to sell. Anything in between is probably a good indicator to hold onto the shares. Investment analysts cited by the CNN Business report have given McDonald’s stock a buy rating.
But is it wise to buy shares now when they are selling at an all-time high? To answer that question, we should first take a look at the company’s balance sheet.
Company’s balance sheet
The debt balance of $35.1 billion the company has, observed against last year’s almost $12 billion of EBITDA, results in a 3.1 debt–to–EBITDA ratio. Moreover, comparing the Forward P/E ratio of 25.38 at which McDonald’s is currently trading to the one of 21.61 of its industry average means that McDonald’s is outperforming most of its peers. The PEG ratio (which takes into account the company’s expected earnings growth rate) is 2.22 at the moment of writing this article, again surpassing its industry ratio of 1.84.
Now that you know the key metrics, your next consideration should be whether McDonald’s stock is appropriate for your portfolio.
Does buying McDonald’s stock make sense in your line-up? Well, are you an aggressive investor who wants to profit from rapidly expanding companies? If so, it might not be the right decision for you to buy MCD stock. However, if you seek a steady return over a longer period, then McDonald’s is worth looking into.
McDonald’s stock is often labeled as safe-play by investors since it falls into the category of dividend shares. Unlike growth stocks, a dividend investment means that you receive a regular dividend payout in predetermined time intervals. Most investors who buy shares in McDonald’s intend to make returns from dividends and look forward to that regular and consistent income.
How to Buy McDonald’s Stock
You have considered everything we discussed so far and decided to go ahead with a purchase, but don’t know how to buy McDonald’s stock?
You can do so in three ways:
- buy stock directly from the company,
- buy stock through an online broker/trading platform, or
- use the help of a financial advisor.
Let’s look into each option:
Directly from McDonald’s
To buy McDonald’s stock directly from the company, you need to enroll in their Computershare Investment Plan, or in layman’s terms, McDonald’s stock investment program. This is, in fact, how you can invest directly into McDonald’s Corporation stock or reinvest your dividends. The steps to achieving this are fairly simple: you receive a brochure on the Computershare site, enroll in the McDonald’s Investment Plan and purchase stocks online.
Online brokers/Trading platforms
Not all online brokers or trading platforms have access to all exchanges. So when you intend to buy McDonald’s stock, you’re looking for a brokerage firm that has access to the New York Stock Exchange. SoFi Invest, Robinhood, TradeStation, and Stash Investment all facilitate NYSE stock investments. Our reviews can help you make your choice, considering all the details.
And if everything aligns, then the following steps are simple and completely online. After creating an account, you deposit the funds into it and hit the buy button!
Making a McDonald’s investment sounds tempting, but you are having trouble making a final decision by yourself? Then professional advice will do you some good.
Everyone can use help from a financial advisor at any point in their life. It doesn’t matter if you are feeling overwhelmed and stressed when it comes to taking care of your finances, or you simply want a professional’s opinion that you are on the right track when considering an investment in McDonald’s.
By consulting a financial advisor whether or not MCD shares are a good fit for you, you are placing the final decision in their hands. They can either make a Mcdonald’s stock valuation for you or make a personalized financial plan with clear financial goals for your portfolio and take it from there.
McDonald’s is a publicly-traded company, and we can all become Mcdonald’s investors. But should we?
By analyzing the company’s stock performance, you can decide if the current high McDonald’s price per share justifies the purchase. Make sure you give some consideration to how the stock fits into your portfolio and reflects your nature as an investor, as well. Setting some clear financial goals is always a good idea.
Hopefully, this article has given you a better insight into the company and its stock performance, and by now, you know how to buy McDonald’s stock. If you are still having trouble with coming to a resolution, you can always opt for a professional’s advice.
Yes, McDonald’s is listed on the New York Stock Exchange. The company’s IPO was on April 21, 1965. The McDonald’s stock ticker is MCD.
The company is one of the Dividend Aristocrats. Not only is it paying dividends, but it has been increasing base dividends for 45 years in a row.
There is no public record of the number of McDonald’s investors. What we know is that the existing shareholders are divided into five categories: Public Companies (0.001% of shares), Private Companies (0.004%), Individual Insiders (0.03%), State or Government (0.04%), and the General Public (31.9 %).
McDonald’s stock is certainly making a good recovery on the post-COVID restrictions market. The article above can help you make a better-informed decision and find out whether and how to buy McDonald’s stock.