“I’ll have a Big Mac, fries and a not so great yield on my bonds please.” Welcome to McDonald’s in 2010. No, the golden arches are not offering to sell their customers a bond together with their Egg McMuffin.
However, they did recently issue a 10 year bond. The rate is impressive – for McDonalds at least, giving a measly 3.5% meaning the bonds may just outpace inflation, but certainly not by much.
What it Means for You
So what does this mean in the grand scheme of things? It means that investors know a good thing when they see it. The house that Ronald built is a growing franchise with solid prospects for the future.
While the yield on the corporate bonds from McDonald’s may not be anything to write home about, the fact is that it is a solid investment where your money can be parked for the next few years with a reasonable assurance of actually keeping your money intact and even growing at a steady, albeit slow pace.
Bonds Are Not the Only Way to Invest
If the yield on the bonds isn’t quite your thing, you may wish to consider direct investment in the Golden Arches instead. McDonald’s stock is a solid investment right now, offering decent yields and a dividend that is (as of this writing) linked to inflation. That means that McD’s stock could be a solid investment.
Showing Growth Overseas
Certainly the company is showing good growth overseas, opening restaurants at a speedy pace in places as far away as Israel and India (in fact, according to reports, McDonald’s is the one and only American chain actually seeing growth in the Israeli market – a small one to be certain, but a solid indicator of the solidity of the brand name).
Steady Growth
In fact, if you look at the stock charts, you will see that McDonald’s stock has enjoyed mostly steady growth over the past year with only a small dip midyear breaking their progress toward the current value of the stock.
Jim Balis' Blog 