McDonald down 32% from its high. The burgers didn't change. The bond market did.
Hi guys rasinbunlover here! This is my first post so I’d appreciate your view and a follow if you like my content:) Came across an interest chart, since March, the US 10Y yield has risen from ~3.95% to 5.28%. Over the same period, $MCD has fallen ~32% from its high. Almost a perfect mirror image MCD vs 10Y 🔍 Why does McDonald trade “against” yields? McDonald's is mature, slow-growing, dividend-heavy and carries a lot of debt. So the market prices it partly like a bond: Higher yields = its steady future cash flows are worth less today A 5%+ Treasury competes directly with its dividend Higher rates slowly raise its own borrowing costs 💰 What the selloff has done to the valuation Forward dividend yield ~3.3%, the highest in over a decade (dividend just raised to $1.93/quarter) P/E at its low