McDonald's Review Essay example

482 Words 2 Pages
McDonald's Review

In 1954, Ray Kroc a salesman, who sold milk shake makers, visited a McDonald's hamburger stand in California that used eight milk shake makers at a time. He had never seen so many people served so quickly. That day he pitched the idea to open up several similar restaurants to the owners Dick and Mac McDonald. His plan was that if they opened up more stores, then he could sell eight milk shake makers to each one. When asked who would open the new hamburger stands, Ray Kroc said that he would do it. In 1955 in Des Plaines, Illinois, Ray Rroc opened his first restaurant and made $366.12 in revenues on his first day. Now there are nearly 27,000 restaurants and 43 million customers served by 1.5 million employees each day
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Greenberg, the Chairman and Chief Executive Officer of McDonald's. Over the past five years, McDonald's stock has had a low of $20.50 in 1996 and a high of $49.55 in 1999. Currently the stock's price is at $30.12. Johnny Hea, a writer for a magazine called The Street Advisor, wrote an article called "You Want Fries with that?"

The article is about how McDonald's stock is undervalued right now and how it would be a good long-term investment to make . Management believes in reinvesting a significant portion of earnings, given their high returns on equity and assets and their global opportunities. Therefore the McDonald's per share dividend is low, but they have a long history of increasing their dividend from year to year. They paid their last dividend at $.05 per share. Also, since going public in 1965, McDonalds has paid twelve stock splits.
For the first time, sales exceeded $40 billion for the year, an increase of 13% from 5years before. Also, total revenues reached $14.2 billion, an increase of 7% since 5 years ago. Now McDonald's has begun a $4.5 billion share repurchase program. Buying back all those shares will positively impact earning per share. Also it shows the companies own belief in how well they think they will do in the future .
If I had money I would invest in McDonald's. Right now its price per share of stock is at its lowest in years and I believe that it will go back up even if the

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