McDonald’s Under a Microscope

By Carly Forster

The McDonald’s Corporation (NYSE:MCD) is an Oak Brook, Illinois based fast-food restaurant chain with more than 35,000 locations across 119 countries.

McDonald’s In The News

The company has been under a lot of scrutiny lately due to a recent food quality scandal in China. It was uncovered that McDonald’s primary food supplier in China, Shanghai Husi Food Co., was selling expired meat to the restaurant chain as well as other fast-food outlets. In response to the scandal, McDonald’s cut ties with Shanghai Husi Food Co., resulting in the temporary halt of sales of burgers and chicken McNuggets in over 2,000 locations across China. Correspondingly, on August 8th McDonald’s revealed a comparable sales decrease of 3.2% in the United States and a decline of 7.2% for the Asia Pacific region.

What Does This Mean For McDonald’s Stock?

On August 6th, Investor Place blogger, Dividend Growth Investor, was rather positive about McDonald’s, focusing more on the stock’s growing dividends. The blogger pointed out that the fast-food chain has been able to increase dividends by 13.9% every year for the past five years. Dividend Growth Investor has a +18.0% average return on all stocks and an 88% success rate in making recommendations. The blogger also has a +4.7% average return on McDonald’s Corporation (NYSE:MCD) stock and is ranked #1 out of 3643 bloggers according to TipRanks.

Mcdonald's

On the other hand, on August 9th Seeking Alpha blogger Nicholas Gentile encouraged his readers to avoid McDonald’s stock. He noted that the fast-food chain has been consistently underperforming the S&P 500 since 2012 and that the company has been having issues with labor complaints, growth, and menu expansion. He also stressed that the food quality issue in China only adds to the list of problems McDonald’s is facing. Gentile has a +0.4% average return on all stocks and a 50% success rate in making recommendations.

Conclusion

McDonald’s has been under the spotlight lately given the recent scandal in China, but do they still have a chance in sustaining strength in your portfolio? Whose recommendation do you trust?

To see all recommendations for The McDonald’s Corporation, visit TipRanks today!

Carly Forster writes about stock market news. She can be reached at [email protected]