12 Best Restaurant Stocks to Buy According to Hedge Funds

3. McDonald’s Corporation (NYSE:MCD)

Number of Hedge Fund Holders: 67

McDonald’s Corporation (NYSE:MCD) is the world’s largest restaurant owner-operator, with over 43,000 locations and 115 markets and system sales of $131 billion in 2024. The firm invented the franchise model and expanded its global presence by forming alliances with master franchise partners and independent restaurant franchisees. The majority of the company’s revenue comes from company-run stores across its three primary segments: the United States, internationally operated markets, and worldwide developmental/licensed markets. Franchise royalties and leasing payments account for around 60% of the company’s total revenue. The stock grew by more than 6% YTD, making it one of the Best Restaurant Stocks.

McDonald’s Corporation (NYSE:MCD) released first-quarter earnings that showed a challenging operating environment for quick-service restaurants. Global comparable sales declined 1% due to Leap Day last year as well as lower guest counts in the United States, which saw a 3.6% decrease in comparable sales.

Nonetheless, McDonald’s Corporation (NYSE:MCD) strategy highlights its competitive advantages using the “MCD” framework, which includes core menu development, relevant marketing, and the four D’s: development, delivery, drive-thru, and digital. The company has recently been highlighting its value offerings in the face of a difficult environment for consumer spending by using its scale-driven cost advantage.

Andrew Strelzik, an analyst at BMO Capital, increased his price objective for McDonald’s Corporation (NYSE:MCD) from $340 to $345 while maintaining an Outperform rating for the company’s stock. In a research note, the analyst informs investors that the company’s Q1 results were difficult as anticipated since favorable G&A and tax rates counterbalanced weaker comps and margin pressure. According to the company, the management also observed that middle-class consumers were feeling more pressured by consumers, but that anti-American attitude had no effect.