Franchise shift boosts McDonald’s

Article Excerpt

MCDONALD’S CORP. $162 (New York symbol MCD; Conservative Growth Portfolio, Consumer sector, Shares outstanding: 785.2 million; Market cap: $127.2 billion; Price-to-sales ratio: 5.6; Dividend yield: 2.5%; TSINetwork Rating: Above Average; is the world’s largest operator of fast-food restaurants, with 37,286 outlets in 120 countries. It serves a wide variety of food, but is best known for its hamburgers and french fries. In the quarter ended March 31, 2018, McDonald’s revenue fell 9.5%, to $5.1 billion from $5.7 billion a year earlier. That’s mainly because the company continues to transfer outlets to its franchisees. Its aim is to have those partners operate 95% of locations, up from the current 92%. As part of that re-franchising plan, McDonald’s recently sold 80% of its 2,700-plus restaurants in China to a group led by a state-owned firm. The company recorded an $850 million pre-tax gain on the sale. Overall earnings in the quarter rose 13.2%, to $1.38 billion from $1.21 billion. Due to fewer shares outstanding, per-share earnings…

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