Weekly Pick: McDonald’s Corporation (NYSE:MCD)
Our Weekly Pick is McDonald’s Corporation (NYSE:MCD)
McDonald’s is the biggest fast-food restaurant chain the world. Despite bad publicity against the health risks associated with their products, and despite having some of the cheapest prices for food anywhere, McDonalds has proven to be an extremely profitable business, even in a slowing economy.
We see that in the month of February, McDonald’s sales have risen about 12%. This is a great indicator for a defensive play for the upcoming months as more economic gloom hits the news. If people are losing their jobs, or have to cut back on their “fancy” meals, you can bet that McDonalds will see increasing sales in the upcoming quarters.
The one thing I’m not too happy with is the stock’s high P/E ratio right now, sitting high at about 26. As a long-term play (5 years +), I wouldn’t recommend as I wouldn’t be surprised if we see a correction once markets start stabalizing. However, because markets are in extreme turmoil right now, investors will be looking to companies like McDonalds who see sales & profits rise during a recession.
We have already seen a 4.57% jump in the price this morning. I expect to see at least another 7% in the next 6 weeks.
McDonald’s Corporation (NYSE:MCD) is a buy.
Disclosure: Author does not have a position in McDonald’s Corporation
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