Ronald McDonald Won’t Go Quietly (MCD)

Comedian/writer/director Paul Feig wrote a hilarious story called The Big Red Shoe Diaries, which I saw him read live many years ago. It’s a comedy that will have you rolling on the floor, because what’s more amusing than hearing a story about a guy who played Ronald McDonald as a teenager? Besides, McDonald’s (MCD) investors could use something to laugh about lately, considering that the chain is really struggling.

To understand what’s going on with McDonald’s stock, you have to know about how the company handles franchises. This is relevant because when you see McDonald’s second-quarter earnings report, you’ll view the number through that prism. I have cousins that own franchises, and one of them is a hardcore businessman. McDonald’s Corporation will frequently send out suggested or required changes and “improvements,” which are often extremely expensive. It might be something like a whole new grilling apparatus, or an exhaust system. They can cost a fortune. McDonald’s stock is up 0.5% in Thursday’s midday trading, so I guess you can’t keep a good clown down forever. But the only attractive thing about MCD right now is its dividend — and you can find 3%-plus yields with far better growth prospects.

Source: InvestorPlace

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