📊 MCD Key Takeaways
Is McDonald's Corp. (MCD) a Good Investment?
McDonald's demonstrates exceptional operational fundamentals with 45.3% operating margins, strong $1.7B free cash flow, and steady 3.7% revenue growth, typical of its capital-efficient franchise model. However, the negative $1.3B shareholders' equity combined with $40.1B debt burden presents significant structural risk that offsets operational strengths and requires careful monitoring of refinancing capability.
McDonald's shows exceptional fundamental quality with very high operating and net margins, steady revenue and EPS growth, and strong free cash flow conversion. The business appears resilient and efficiently run, but the balance sheet is aggressive, with very high long-term debt, negative equity, and only modest liquidity, which keeps the rating below the highest tier.
Why Buy McDonald's Corp. Stock? MCD Key Strengths
- Exceptional operating margins at 45.3% reflecting highly profitable franchise-landlord business model
- Strong free cash flow generation of $1.7B (26.5% FCF margin) supports debt service and shareholder returns
- Solid interest coverage ratio of 7.4x indicates adequate capacity to service debt obligations
- Very strong profitability, including 46.1% operating margin and 31.9% net margin
- Consistent growth profile with revenue up 3.7%, net income up 4.1%, and diluted EPS up 4.9% year over year
- Robust cash generation with $10.55B operating cash flow and $7.19B free cash flow, equal to a 26.7% FCF margin
MCD Stock Risks: McDonald's Corp. Investment Risks
- Critical balance sheet concern: negative shareholders' equity of -$1.3B indicates liabilities exceed total assets
- Extreme leverage with $40.1B long-term debt against $60.0B total assets and only $1.2B cash reserves
- Heavy dependence on franchisee financial health and ability to maintain steady rent/royalty payments in economic downturns
- Negative stockholders equity indicates an aggressively levered capital structure and reduces balance sheet flexibility
- Long-term debt of $39.97B is high relative to cash of $774M, increasing refinancing and interest burden risk
- Current ratio of 0.95x and quick ratio of 0.94x suggest limited short-term liquidity buffer
Key Metrics to Watch
- Operating cash flow sustainability amid franchisee economic pressures
- Debt refinancing conditions and interest rate environment impact on coverage ratio
- Shareholders' equity trajectory and management's capital allocation strategy
- Free cash flow and operating cash flow sustainability
- Interest coverage and long-term debt trend
McDonald's Corp. (MCD) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 26.5% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
MCD Profit Margin, ROE & Profitability Analysis
MCD vs Consumer Sector: How McDonald's Corp. Compares
How McDonald's Corp. compares to Consumer sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is McDonald's Corp. Stock Overvalued? MCD Valuation Analysis 2026
Based on fundamental analysis, McDonald's Corp. has mixed fundamental signals relative to the Consumer sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
McDonald's Corp. Balance Sheet: MCD Debt, Cash & Liquidity
MCD Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: McDonald's Corp.'s revenue has grown significantly by 16% over the 5-year period, indicating strong business expansion. The most recent EPS of $11.56 reflects profitable operations.
MCD Revenue Growth, EPS Growth & YoY Performance
MCD Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $6.0B | $1.9B | $2.60 |
| Q3 2025 | $6.9B | $2.3B | $3.13 |
| Q2 2025 | $6.5B | $2.0B | $2.80 |
| Q1 2025 | $6.0B | $1.9B | $2.60 |
| Q3 2024 | $6.7B | $2.3B | $3.13 |
| Q2 2024 | $6.5B | $2.0B | $2.80 |
| Q1 2024 | $5.9B | $1.8B | $2.45 |
| Q3 2023 | $5.9B | $2.0B | $2.68 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
McDonald's Corp. Dividends, Buybacks & Capital Allocation
MCD SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for McDonald's Corp. (CIK: 0000063908)
📋 Recent SEC Filings
❓ Frequently Asked Questions about MCD
What is the AI rating for MCD?
McDonald's Corp. (MCD) has a Combined AI Rating of BUY from Claude (HOLD) and ChatGPT (BUY) with 76% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are MCD's key strengths?
Claude: Exceptional operating margins at 45.3% reflecting highly profitable franchise-landlord business model. Strong free cash flow generation of $1.7B (26.5% FCF margin) supports debt service and shareholder returns. ChatGPT: Very strong profitability, including 46.1% operating margin and 31.9% net margin. Consistent growth profile with revenue up 3.7%, net income up 4.1%, and diluted EPS up 4.9% year over year.
What are the risks of investing in MCD?
Claude: Critical balance sheet concern: negative shareholders' equity of -$1.3B indicates liabilities exceed total assets. Extreme leverage with $40.1B long-term debt against $60.0B total assets and only $1.2B cash reserves. ChatGPT: Negative stockholders equity indicates an aggressively levered capital structure and reduces balance sheet flexibility. Long-term debt of $39.97B is high relative to cash of $774M, increasing refinancing and interest burden risk.
What is MCD's revenue and growth?
McDonald's Corp. reported revenue of $6.5B.
Does MCD pay dividends?
McDonald's Corp. pays dividends, with $1,323.0M distributed to shareholders in the trailing twelve months.
Where can I find MCD SEC filings?
Official SEC filings for McDonald's Corp. (CIK: 0000063908) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is MCD's EPS?
McDonald's Corp. has a diluted EPS of $2.78.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is MCD a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, McDonald's Corp. has a BUY rating with 76% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is MCD stock overvalued or undervalued?
Valuation metrics for MCD: ROE of N/A (sector avg: 18%), net margin of 30.4% (sector avg: 8%). Compare these metrics with sector averages to assess valuation.
Should I buy MCD stock in 2026?
Our dual AI analysis gives McDonald's Corp. a combined BUY rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is MCD's free cash flow?
McDonald's Corp.'s operating cash flow is $2.4B, with capital expenditures of $682.0M. FCF margin is 26.5%.
How does MCD compare to other Consumer stocks?
Vs Consumer sector averages: Net margin 30.4% (avg: 8%), ROE N/A (avg: 18%), current ratio 1.14 (avg: 1.5).