McDonalds, one of my core holdings, recently reported their Q1 numbers with sales declining 1.7% overall; much of the decline can be blamed on rivals, creating new competitive products with compelling discounts and adverse weather conditions.
Net income was down somewhat from the previous year’s Q1 $1.27B to $1.2B; $1.21 of earnings per share fell short of analysts expectations of $1.24.
Holding up MCD’s performance to my rules I find slight, but continued growth in the bottom line, solid improvements in FCF, a payout ratio that hits the mark for the quarter and shows continued decline on the trailing 12 months basis. 5-year CAGR of 12% coupled with a 3% yield puts total returns at north of 15%. MCD has maintained it’s Dividend Aristocrat standing, barely, so gets a pass until at least this fall.