McDonald’s Doesn’t Cost The Same Everywhere - InvestingChannel

McDonald’s Doesn’t Cost The Same Everywhere

Proprietary Data Insights

Top Restaurant Stock Searches This Month

Rank Name Searches
#1 Starbucks 19,198
#2 McDonald’s 14,184
#3 Chipotle Mexican Grill 8,607
#4 Jack In The Box 6,651
#5 Domino’s Pizza 5,006

Inflation Fluctuates By State 

As The Cleanse will show you in a minute, what you pay for a Big Mac varies depending on where you live. 

McDonald’s (MCD) stock – that’s another story. Everybody pays the same price. 

But first, Senate Republicans put out an interesting report detailing state-by-state variations in how much inflation is costing the typical household. 

Thanks to inflation, the average American household is on the hook for an extra $635 a month, with $77 of that total going towards food. 

However, if you live in the District of Columbia, you’ve been set back $901 a month. That’s the most in the country. 

In terms of actual states and how much more residents in them are paying to live each month, it looks like this: 

  • Colorado, $825 ($87 for food)
  • Utah, $800 ($85) 
  • Minnesota, $747 ($91) 
  • Arizona, $733 ($77) 

You’re best off in the following states:

  • West Virginia, $494 ($50) 
  • Mississippi, $496 ($66)
  • Arkansas, $514 ($58) 
  • Pennsylvania, $517 ($73) 

One other notable item:

Leaving DC aside, the cost of energy inflated most in Texas, setting the typical household back $225. Maybe they need more windmills!

Investing

McDonald’s Doesn’t Cost The Same Everywhere

Key Takeaways:

  • The cost of a meal at McDonald’s varies somewhat considerably by location. 
  • McDonald’s stock doesn’t work this way. 
  • In a scary stock market, McDonald’s provides stability in more ways than one. 

 

In April, we suggested taking a look at McDonald’s stock. Three months later, we figured we’d check back in and see how it’s doing. 

But first…

It Costs Less To Buy A Bunch Of Fruit

Here’s a sampling of what a typical combo meal will run you at McDonald’s across the United States and around the world: 

  • New York, NY – $10.00
  • Chicago, IL – $8.50 
  • San Antonio, TX – $8.00
  • Spokane, WA – $10.00
  • San Francisco, CA – $11.00
  • Seoul, South Korea – $6.00
  • Tokyo, Japan – $5.14
  • Istanbul, Turkey – $3.76

Meaningful differences, particularly if you’re eating McDonald’s every single day. Which, of course, you shouldn’t be doing. For $10, you can get several pounds of fresh produce in most places across the US. 

You’re definitely better off taking the healthy food route. You might also be better off buying McDonald’s stock. 

Since we put it on your radar, it hasn’t changed much. In this market, that’s a good thing. 

Source: Google Finance 

Check that s**t out. 

McDonald’s stock blows away its peers, trouncing the returns of the restaurant stocks investors search for most, based on data from our proprietary Trackstar database. 

Why?

The Cleanse thinks MCD leads the pack for three reasons. 

Growth. Even during turbulent times, McDonald’s continues to grow. It plans to open 1,800 stores globally by the end of the year, while closing ust 400. So, there’s obviously demand. 

McDonald’s raised menu prices by 8% at the beginning of the year, however the company still beat analyst estimates on revenue and profits in Q1. It reports Q2 results later this month. 

Consistency. You know what to expect at McDonald’s. Anywhere in the world. This can feel a bit boring, however sort of like Starbucks (SBUX), it helps build loyalty. Even as prices increase, you can still count on McDonald’s – as a reliable brand – and take comfort in the fact that you know what you’re getting when you hit the drive-thru. 

The Dividend. This might be the biggest factor from a pure investing standpoint. The Cleanse loves dividend aristocrats. And McDonald’s is one of the best, having increased its annual dividend payment 46 years in a row. 

At the moment, McDonald’s pays out a dividend of $1.38 per share every quarter. Combined with the relatively stable stock price, you can’t ask for much more, especially in this market. 

The Bottom Line: You don’t have to eat at McDonald’s to be lovin’ it

In a stock market with far more losers than winners over the last year. In an environment where investors search for income to help offset the rising cost of everything, it almost always makes sense to revert back to the tried and true. 

You’d be hard-pressed to find a stock that checks as many boxes as MCD, particularly if you’re a long-term investor who sees the value in relative boredom as you look to balance growth and income.

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