The idea companies for long-term investments are those that offer not only a constant, growing stream of income, but potential for growth as well. For large, stable corporations, growth usually means that they are good at adapting to changing business environments (new technologies, changing tastes of customers, etc.) If these are the qualifications, it is tough to find a better option than McDonald’s Corporation (NYSE:MCD) for your portfolio.
About McDonald’s Corporation
McDonald’s Corporation (NYSE:MCD) is arguably the world’s most recognizable brand name (Coca-Cola is up there too), and for good reason. Currently the company owns or franchises over 33,700 of its restaurants in 119 countries, making it the largest fast-food chain in the world. With $32 billion in U.S. sales out of the $162 billion quick-service industry (or a 20% market share), McDonalds is many times larger than its nearest competitors, such as The Wendy’s Company (NASDAQ:WEN) or Burger King Worldwide Inc (NYSE:BKW). In other words, 1 in 5 quick-service restaurants in the U.S. are McDonalds!
As mentioned before, the major thing that keeps great companies great is adaptability. McDonald’s Corporation (NYSE:MCD) has shown time and time again that they have an extraordinary ability to change with the times at keep giving their customers what they want. McDonald’s original menu consisted of burgers, fries, and shakes (maybe sodas too). Their menu has evolved so much over the years that even the McDonald’s menu of 10 years ago would be almost unrecognizable compared to today.
Why McDonalds Will Stay Great
The main difference lately has been the trend toward healthier options. First, McDonald’s Corporation (NYSE:MCD) got rid of their well-liked “super-size” option. Then, gradually over the past several years, healthier menu options began appearing on the menu. This year, the company has said it plans to focus more energy on its breakfast menu, and just a few days ago announced that it will be introducing an egg white version of its famous Egg McMuffin sandwich, which had been completely unchanged for many years.
The point of all of this is that not only will these changes allow McDonald’s Corporation (NYSE:MCD) to attract new, more health-conscious customers, while retaining its current customer base. Additionally, healthier options tend to have higher profit margins, as consumers are willing to pay more of a premium for quality.