McDonald’s resilience and capital‑light nature of its business model is the first major reason to buy this blue-chip favourite. More than 95% of its restaurants are franchised, which means the company collects relatively stable rent and royalties rather than bearing the full volatility of restaurant‑level costs. This leads to structurally high operating margins and robust free cash flow through economic cycles. This model has allowed the company to compound earnings per share via a combination of moderate systemwide sales growth, price/mix, and substantial share repurchases and dividends over time.
A second reason is the company’s global scale and brand strength, which give it pricing power and bargaining leverage in both supply chain and real estate. The brand is among the most recognized in the world, with about 45,400 locations and roughly 68 million customers served daily, which is very difficult for competitors to replicate. Digitalization, delivery, and loyalty programs add another layer of growth, while its drive‑thru and operational expertise help maintain throughput even with higher complexity.
Meanwhile, the stock trades at 21.2 times the company’s forward earnings forecast, a reasonable multiple given its history of resilience in recessions, high returns on capital, and largely franchised, cash‑generative model.
MCDONALD’S CORP. (New York symbol MCD; www.mcdonalds.com) is the world’s largest fast-food chain with 45,356 restaurants in over 119 countries. It serves a wide variety of foods but is best known for its hamburgers and french fries. Franchisees operate about 95% of the company’s outlets.
McDonald’s has three main divisions:
The U.S. (40% of revenue in 2025, 47% of earnings); International Operated Markets (51%, 51%), which focuses on developed countries outside of the U.S., including Canada, Australia, the U.K., France, Germany, Italy, the Netherlands and Spain; and International Developmental Licensed Markets (9%, 2%), mainly developing countries.
The main driver of McDonald’s recent success is its three-part “M-C-D” growth plan:
- Maximize our Marketing involves advertising and promotions that emphasize the company’s well-known brand and the value of its food;
- Commit to the Core aims to build on its main menu items: burgers, chicken products and coffee; and
- Double Down on the 4Ds:
Digital involves expanding its online ordering systems. That mainly includes enhancing its smartphone app and loyalty rewards plan. McDonald’s plans to increase the number of customers that use the app at least once every 90 days from the current 210 million customers to 250 million customers by the end of 2027.
Delivery involves expanding home delivery service, which became very popular during the pandemic. Over 41,000 (90%) outlets in 100 countries now offer delivery service. McDonald’s plans to increase the percentage of delivery orders made through its mobile app to 30% by the end of 2027.
Drive-Thru involves installing more drive-thru lanes at existing locations. More than 29,000 restaurants globally, including 95% of U.S. locations, have these lanes.
Development involves opening new outlets. In 2026, McDonald’s is planning to open 2,100 restaurants (net of closures) worldwide, including 750 in the U.S. Those new outlets, along with upgrades to existing locations, will cost between $3.7 billion and $3.9 billion. By the end of 2027, the company expects its store count will total over 50,000.
McDonald’s growth keeps on coming with value meals, new items and more
The company continues to benefit from its lower-priced value meals, which give increasingly cost-conscious customers a discount on combination orders.
McDonald’s revenue in the three months ended March 31, 2026, rose 9.4%, to $6.52 billion from $5.96 billion a year earlier. That topped the consensus forecast of $6.47 billion.
The company’s overall same-store sales improved 3.8%. That’s due to gains at all three of its divisions: up 3.9% at the U.S. stores; up 3.9% at International Operated Markets (Australia, Canada, France, Germany, Italy, the Netherlands, Spain and the U.K.); and up 3.4% at International Developmental Licensed Markets (mainly outlets in China, Japan, the Middle East and all remaining markets).
The higher revenue also lifted McDonald’s earnings before unusual items by 5.2%, to $2.02 billion from $1.92 billion. Due to fewer shares outstanding, per-share earnings gained 6.0%, to $2.83 from $2.67. That also beat the consensus estimate of $2.74.
McDonald’s continues to boost its efficiency. For example, it’s expanding its cloud-based computing platform to all of its stores. That will simplify and speed up the launch of new menu items and promotions.
The company also aims to attract more customers with new menu items, including its Big Arch burger and sodas topped with cold foam.
These moves should increase this year’s earnings by about 8% to $13.20 a share. The stock trades at a reasonable 21.2 times that estimate. The $7.44 dividend yields 2.7%.
McDonald’s also raised your quarterly dividend by 5.1% with the December 2025 payment, to $1.86 a share from $1.77. The new annual rate of $7.44 yields 2.3%. The company has now raised its annual dividend rate each year since 1976.
Recommendation in Wall Street Stock Forecaster: McDonald’s Corp. is a buy.
