The Best Stock in Illinois: McDonald’s
We analyzed publicly traded companies based in the Prairie State to identify the best stock in Illinois to buy now.
A word of caution: Since we selected a single stock from each state (plus one from D.C), and choices in some states are sparse, a few of our picks are best suited to investors comfortable with a higher degree of risk. This is not necessarily one of our 51 favorite stocks in the entire U.S., in other words.
McDonald's by the Numbers
- Headquarters: Oak Brook
- Share price: $154.80
- Market value: $126.2 billion
- Price-earnings ratio: 24
(Prices and data are as of June 22, 2017)
McDonald’s is in the middle of a multiyear turnaround. In 2015, the company initiated efforts to sell 4,000 corporate locations to franchisees by 2018, eventually reducing annual costs by $500 million. The company now plans to finish this process by the end of 2017. McDonald’s posted stellar first-quarter numbers, beating earnings estimates and posting a 4% gain in global sales for restaurants open at least a year, compared with the first quarter of 2016.
One quarter doesn’t make McDonald’s a high-growth company, say analysts at Credit Suisse. But the results are impressive at this stage of the company’s turn-around effort. They add that years of investment overseas, in digital platforms and kiosks, for example, are helping international sales pick up steam. Credit Suisse believes the stock could hit $165, a 6.6% bump from the current price, over the next 12 months.
Plus, McDonald’s remains a safe bet for income investors. Mickey D’s has raised its dividend in every year since it began paying one in 1976. CEO Steve Easterbrook said in April that the company plans to return $22 million to $24 million to investors from 2017 to 2019 in the form of dividends and share buybacks. The stock currently yields 2.4%.