McDonald's Corporation (MCD): investment thesis checklist
What a value investor writing down why they own McDonald's Corporation would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Free cash flow yield: 3281977.9% in FY2025; between 2.6% and 3523705.1% over 10 filed years, median 1404625.9%. Does the thesis need it to stay inside that range?
- EV to EBIT: 4.67x in FY2025; between 4.30x and 28.53x over 8 filed years, median 4.79x. Does the thesis need it to stay inside that range?
- Price to earnings: 25.58x in FY2025; between 22.37x and 34.01x over 10 filed years, median 25.61x. Does the thesis need it to stay inside that range?
- Operating margin: 46.1% in FY2025; between 31.4% and 46.1% over 10 filed years, median 42.2%. Does the thesis need it to stay inside that range?
- Net debt to EBITDA: 4.51x in FY2025; between 3.34x and 6.30x over 8 filed years, median 4.42x. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 7.0% in FY2025; between -5.5% and 7.0% over 10 filed years, median -1.5%. Does the thesis need it to stay inside that range?
- Share count change: -0.8% in FY2025; between -100.0% and -0.8% over 10 filed years, median -2.3%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from McDonald's Corporation's own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Revenue Growth 1Y stays at or above 0%
Today 3.72%. Replayed over 9 filed years, it would have broken in 4; most recently FY2022, at -0.17% (10-K, filed 2023-02-24).
Current Ratio stays at or above 0.76x
Today 0.95x. Replayed over 10 filed years, it held in every one.
Dividend Rate stays at or above $7.64
Today $7.72. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
3. What would break it
- A filed year in which revenue growth 1y fell below 0%.
- A filed year in which current ratio fell below 0.76x.
- A filed year in which dividend rate fell below $7.64.
4. The published tests it meets today
Of 30 tests value investors published: 1 met, 20 not met, 9 we could not complete. Counts, never a score.
Meets: Cash-covered dividend.
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
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How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.