Tags: McDonalds | global | growth | MCD

McDonald's Pushes for Global Growth

By    |   Wednesday, 28 Dec 2011 04:32 PM

McDonald's (MCD) can seem a stock nearly everybody should own. The company has a tremendous track record of rewarding investors. Corporate management continues to push global growth with new initiatives.

McDonald's has 33,000 restaurants in over 100 countries worldwide. The company is organized on a franchise system, with about 60 percent of stores owned by franchisees, 20 percent by foreign affiliates or developmental licensees, and 20 percent by the company.

McDonald's divides its businesses into the four segments: the United States, Europe, Asia/Pacific/Middle East/Africa (APMEA) and other countries, plus corporate. By location, 43 percent of restaurants are in the United States, 26 percent in APMEA, and 21 percent in Europe. Of total revenues, 40 percent is generated in Europe, 34 percent in the United States, and 21 percent in APMEA.

For the first nine months of 2011, McDonald's reported revenue of $20.2 billion, up 13 percent from 2010 and up 8 percent on a currency neutral basis. Net income for the period was $3.94 per share, up 15 percent from $3.42.

Five percent of the profit gain was due to favorable currency rates. For the 2011 full year the consensus earnings estimate is $5.23 compared to earnings of $4.61 in 2010. For 2012, the forecast earnings are $5.73.

New initiatives

For 2012, McDonald's forecast opening 1,300 new restaurants compared to 1,150 new stores in 2011. Same store sales continue to grow, with more than 100 consecutive months of same store sales growth through November 2011. Growth initiatives in the stores include expanded breakfast offerings and adding McCafe gourmet coffee service to more locations, a high-margin lineup.

McDonald's has increased the annual dividend for 35 consecutive years. The annual payout increased to $2.80 at the end of 2011 from $1 in 2006. An aggressive share buyback program — $17 billion during the last six years — added an additional boost to earnings per share.

Recently, Matt DiFrisco, senior restaurant analyst at Lazard Capital Markets, noted McDonald's has the second-highest yield in the restaurant sector in spite of a recent share price run up. He reiterated a buy rating.

The company next reports on Jan. 24.

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McDonald's (MCD) can seem a stock nearly everybody should own. The company has a tremendous track record of rewarding investors. Corporate management continues to push global growth with new initiatives. McDonald's has 33,000 restaurants in over 100 countries worldwide....
McDonalds,global,growth,MCD
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2011-32-28
Wednesday, 28 Dec 2011 04:32 PM
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