My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ?
"Why not both" I asked myself ?
Wouldn't there be more upsides comparatively speaking ?
Having put the theory to test on companies type (see below for details); time to try it on an Integrated Freight & Logisticsstock ?
Gonna put $McDonald's(MCD)$ to the test & see if it fits the bill.
Sidetrack: Below are stocks that I have covered. Interested ? Click to read. Please "Like" to show some love okie ? Thanks !
- United Parcel Service (UPS)
- Apple Inc
- Spotify Inc
- Meta Platform (Facebook)
- AMD Inc
- Snap Inc
- Lam Research (semicon)
- General Motors
- Visa Inc
- The famous Golden Arches that has littered the world over
- The smart thing the Management has promoted is to allow each region's autonomy over its menu; apart from the must-have, signature burgers made famous worldwide eg. Big Mac, Filet-o-Fish
- Without much ado, lets jump into its quarterly earnings
Current stock price > 07 Feb 2022 stock price by +8.07% - IMPRESSIVE
McDonalds - Summary
- Revenue came in at $5.9 Billion vs $6.0 Billion (Q4 2021); thats a -1.67% decline which is almost negligible.
- Net income came in at $1.9 Billion vs $1.64 Billion (Q4 2021); thats a whooping +16% gain. Impressive. And this is the crucial bottom line figure !
- Earnings per share (GAAP) was $2.59 vs $2.18; thats a +19% gain. Again, bravo !
- Will not dwell on Adjusted EPS since the difference is marginal only.
McDonalds - Revenue by Components
- Like any worldwide fast food chain - the business model operates in 2 modes - (a) restaurants run by the organisation itself (usually the money spinning ones) and (b) restaurants operated by licensees "on behalf" of the company.
- As could be inferred from above, both modes of business are contributing towards the topline with "self-run" restaurants registering a +4.25% growth from Q3 2022.
- Franchisee restaurant from Q3 2022 to Q4 2022 saw a miniscule dip of -0.54%
- Given the pandemic situation, the results are credible.
McDonalds - Sales by Regions
- Above is further sales analysis breakdown; that is necessary to find out whether McDonald's businesses - local & worldwide are growing in tandem
- As could be inferred from the data - Sales overall grew an impressive +12.6% in Q4 2022
- By region, each of the major key indicators are all registering healthy growth of at least 10%; with International Licensees gaining the most at +16.5%.
- There is really "nothing" much to complain about MacDonald's other information.
- At a time when all Tech companies' (eg. Meta, Google, Amazon, Twitter) operating costs & expenses have increased by leaps & bounds - leading to them laying off staff now to the tune of 10,000 staff etc..
- MacDonalds actually managed to reduce its costs of running business by -7%; given the tight labour market and escalating salaries. Now, what do you have to say to that ?
McDonalds's CEO on Q4 2022 Results
While we expect short-term inflationary pressres to contineu in 2023, we remain highly confident in Accelearting the Arches, which now includes a greater emphasis on new restaurant openings. The recently announced Accelerating the Organisation initiative will complement this strategy to enable the McDonald's System to be faster, more innovative and more efficient. McDonalds, CEO, Chris Kempczinski....
Is McDonalds A Good Price and Good Company ?
- So far, with all the companies reporting their Q4 2022 earnings - especially the Tech companies and Financial institutions - most have either missed their top line or bottom line
- No different for McDonalds in that its top line has fell by -1.0% (big deal). However its bottom line of +16% have more than made up for it - agree !
- Looking at CEO's summary on its Q4 2022 results, one can sense that this Food conglomerate is pushing ahead with its expansion plan
- Like other American corporates, McDonalds has exited Russia market in soldarity against its political ambition
- Do you think there is money to be made in the Food Industry even in times of inflation, recession or deflation ?
- Do you think now is the time to take a stake in McDonalds ?
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