Buying McDonald’s Stock Is Approaching No-Brainer Territory

It’s weird living in a world where the stock demands 30x earnings for a share of Brown Forman to give you a 1.3% dividend yield while shares of McDonald’s trade at 17x profits and give you a starting dividend yield of nearly 3.5%. For comparison purposes, 2009 was the only year in McDonald’s history when the stock averaged yielding above 3.5% for the entirety of the year.

What’s the cause? From 2011 through 2013, the input costs for food ingredients at McDonald’s rose, and the company largely absorbed the cost to accept lower profit margins on its food items but hoped to make it up through higher volume and the continued opening of new stores internationally. Over the past twelve months, the company said, “Enough” and started raising the prices on its dollar menu and increased the prices on its value meals.

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