Friday, January 23, 2009


I love McDonald's. I love the fries, the chicken nuggets, the burgers, the chicken sandwiches, and the sausage egg McMuffin. I even love the Happy Meal toys. Writing this post is making me hungry. But I'm not on the subject because of yesterday's food budget post.

Recently, Five Cent Nickel published a list of the most consistent dividend-paying stocks and McDonald's was on there. And the New York Times recently wrote about McDonald's as a counter-recessionary success story. McDonald's had been off my radar for awhile, but these two things reminded me that McDonald's has been a great investment for most of its history.

I bought stock in McDonalds in January 2003. It was actually the first individual stock I ever bought, and I don't dabble in individual stocks very often. I bought it because I'd read an article about how to estimate the down-side price of a stock and McDonald's was one of the examples of a price that seemed to be under-priced. I wish I still had that article, as they really were right. McDonald's turned out to be a very good investment for me:

Bought: 1/13/06 @ $17.35
Sold: 4/21/06 @ $34.87
I sold it to free up some cash for my condo, but now I wish I'd bought even more shares and held onto them:
Current share price as of 1/22 close of market: $58.72
Check out the history at Google Finance. In tough times, I guess a lot of people are looking for cheap meals, and McDonald's seems to be well-positioned to take advantage of that.


Anonymous said...

Yes a bad economy is good for bad cheap food like mcdonalds. They fear a deep recession will lead to further obesidy in the US. As people look for ways to save money, they will stop purchasing more expensive quality whole foods, vegatables, fruits and start eatting processed foods high in sugar. ex: fast food, PbJ's.

If you want to see something go to YouTube and search Is McDonalds real food?

They should a big mac and fries that a lady kept in a lunch box for ten years. It looked like it was a week old, how could real food stay in normal shape without rotting and have no mold for 10 years?

Peachy said...

My father-in-law owns some fast food Greek restaurants. This past December and early January he had his best week profit ever (he's been in business 25+ years). People don't stop eating out when times get bad, they just go somewhere cheaper. For him, business is bad when times are good.

Anonymous said...

That's disgusting. Not that you bought the stock, but that you love McDonald's food.

modena604 said...

happy friday!!!
i like to eat mcdonald's but don't eat it very often.
you forgot to mention the yummy hashbrowns.
have good weekend Madame X.

pharmboy said...

It's nice to see someone else who loves Mcdonald's. Like President George W. Bush, people tend to love him or love to hate him, and it seems that most Americans tend to hate McDonald's these days.

I'll always have fond memories of my three-breakfast road trip from a couple years ago: sausage mcmuffin with a Dr. Pepper at 5:30 a.m., 8:00 a.m., and 10:29 a.m.

God Bless America.

shaki said...

i ate a lot of McD's when i was crushing my debt... good thing i didn't get sick! My lunch limit was $2/day.

I don't eat there now, but i heart Filet 0' Fish!!! And i second the hashbrown (with ketchup) comment above! :)

Tally Girl said...

Man, if you could find that article...I could really use something like that right now. We are buying individual stocks for the first time and are a little blindsided by all the information out there.

I am all about the McDonalds cheeseburger. Seriously. So good.

Anonymous said...

McDonald's might be cheap but not worth the doctor bill from eating their 'food'. I don't hate McDonald's, I just love real food.

Optioned Unarmed said...

I typically stop at McDonald's whenever I am driving cross-country, because they always have the cleanest bathrooms. After I use the restroom I will sit outside in the parking lot eating whatever healthy food I brought from home. God bless America, indeed.

Mike said...

I admit that I enjoy the occasional trip to McDonald's, but I've come to the conclusion that eating McD's regularly is more expensive in the long-run due to increased risk of heart disease, diabetes, obesity, etc. Pay a little more for real food now and pay less in medical expenses later!

Chad @ Sentient Money said...

McDonald's? I'm not surprised, as people are stupid. If you want cheap and are unconcerned about taste, which you have to be to eat at McDonald's, just buy bulk rice and beans. A few different spices can make that into a dirt cheap meal that won't necessarily cause you to die at 37.

Charles said...

Wow, what a ton of vitriol over McDonalds. Have you been to a McDs lately. They have improved with salads, apple slices, grilled offerings. Are they perfect, no but who is.

What amazes me, and count me in on those who like McDonalds the stock is their international presence, they localize their products aggressively. My favorite is Taro pies in Shanghai (and I assume other Chinese cities as well).

McDonalds is really culturally fascinating, credited with teaching the Hong Kong residents to queue, for fattening America (though I think that has much to do with our love of driving as much as fast food). It serves as a meeting hall for people in some countries.

As far as taste and quality of food, even Julia Child raved about the consistency of the french fries.

If you are going to be knee-jerk, be at least knee jerk in a non-cliched manner.

Suzy said...

Agree with Charles on a few points. There is both real - and non-real food to be had at McDonald's... I'm no activist, and I grew up eating McD's almost weekly in the suburban south. You can't beat a french fry and packet-ketchup craving. And the stock performance, highlighted along with Walmart for their efficiencies, has delivered.

But, I think it's fair to say the true cost of generating those efficiencies is not being reflected in the prices: (of food or of the stock). A recent read was Omnivore's Dilemma, which describes some of the CAFO agricultural operations that allows for most of McDonald's commodity ingredients to be sold for less than they cost farmers to produce. It's interesting to see Walmart and McDonald's lumped together as consistent performers... they are probably some of the most influential in shaping our industrial food system in America...

Anonymous said...

I completely agree with Charles and Madame X. I love McDonald's but maybe only eat there 5 or 6 times a year - everything in moderation!

Anonymous said...

"As far as taste and quality of food, even Julia Child raved about the consistency of the french fries."

Yes, McDonald's fries tend to have that filmy after taste just about everywhere.

Jason from MoneyTheory said...

In any given economic situation, good or bad, there will always be someone who benefits - I think almost all the fast food companies are. And they're being smart too. They know they have an inexpensive product, and I have seen commercials recently for several chains advertising full meals for around $3. Now that's tough to beat! Everyone has to eat, so I'm sure they are getting a lot more business when people are looking to save money!

frugal zeitgeist said...

Sorry, can't get on board with McDonald's or fast food in general. Speaking strictly for myself, though, no judgment of anyone else implied.

bugbear said...

I love their fries. I have them about once a year. The Julia Child comment probably dates from back when they were still using beef fat to fry the fries, which gives an amazing flavor along with MCD's famous consistency.

These days they are also cross-selling higher-end espresso drinks in many markets now, which I'm sure pops up the average ticket a little bit.

Incidentally, McDonalds also owns some other businesses and I believe it is a part owner of RedBox.