McDonald's

Methodology

McDonald's franchise-heavy model generates highly predictable earnings driven by royalties and rents, making this calculation reliable and straightforward. Global unit growth and comparable-store sales provide clear visibility into sustainable earnings trajectories. The asset-light business model creates more earnings stability than company-operated restaurant chains.

Methodology

McDonald's consistently commands premium PEG ratios reflecting exceptional brand strength, global scale, and franchise business quality that generates steady cash flows. While growth appears modest, the defensive characteristics and consistent execution justify valuations above restaurant peers. Compare to McDonald's historical range rather than absolute thresholds or casual dining competitors.

Methodology

McDonald's offers a substantial and steadily growing dividend supported by franchise cash flows, making PEGY analysis essential for evaluating total return potential. The dividend has increased annually for decades, creating reliable income alongside modest growth. For this mature blue-chip restaurant franchisor, dividend growth matters as much as earnings expansion in delivering shareholder returns.