Bill DeShurko is not deterred by McDonald’s second-quarter earnings miss, and still thinks the stock is a long-term value.
The manager of the Dividend and Income Plus model says he is still a holder of the stock, due to its strong global brand and high dividend yield of more than 3%.
McDonald’s reported EPS of $1.32 a share, short of analyst expectations of $1.38. Operating margins were pressured, and currency had a negative effect on the results.
You can read more about the results here.
And here is DeShurko’s take:
I’m still bullish on McDonald’s for my dividend and growth plus model.
I think MCD gets a little abused here from the growth stock investors that were buying the stock as a global growth play.
For me, McDonald’s is purely a dividend play, with extremely high probability of being a dividend growth play.
Earnings were still up by 1%, and same store sales remained strong. In a financial world where deflation appears to be the biggest macro risk, what’s not to like about a solid 3% dividend yield?
Domestically, we’ve seen MCD’s sales increase in a recession as the “eat out” crowd migrates to value.
I do not think that McDonald’s is in danger of a dividend cut.
Is now the time to buy, or wait for a bigger dip?
As I’ve said before, I like this stock as long as the dividend yield is more than 3%. Forward P/E is still under 15.
This is a quality holding to wait out the global turmoil.
Yes, if Europe starts to break up, all stocks could get whacked.
But if you need income now, McDonald’s is a solid dividend payer.
