McDonald's is a stock that we used to own. We sold it. The chief, Steve Easterbrook (new), delivered a 23 minute message to stakeholders, franchise owners and employees (stakeholders, medium rare) in presenting the turnaround plan yesterday. If you are interested in watching, here goes: McDonald's turnaround plan. The crowd did not roar with excitement, the stock was a noticeable loser on the day. The long and the short of it all is that you would not need to present a plan if the current one was not working. McDonald's has been a loser on the technology front (Easterbrook cites a lack of innovation as a reason they have lagged).
You would have to say that if you were chasing yield, this is not a bad place to park money, a 3.5 percent yield before tax in the current environment is good, the shareholders when comparing their returns to the competition want more. A burger is just not a burger. There are gourmet burgers, carb free burgers. I suspect however that the business is better owned when the going gets tough (says Billy Ocean), when the economy is going through a tough patch and hungry folks shop down to affordable quality. As the economy turns, people look for less reliable and more exotic. A burger will always be a burger, the company will always be around, and in the end the menu will adapt to suit the needs of the consumer, albeit at a slow pace. At current growth rates that yield would have to be in the region of 5 percent pre tax to entice me.