Tomahawk, WI 08/11/2014 (Basicsmedia) – McDonald’s Corporation (NYSE:MCD) has not had the best of runs in the market amid increased competitive pressure as well as the fallout of food scares in China. The giant food store has already admitted that its global sales for the year are at a risk, after recording a 2.5% slump in sales for July. Despite the ongoing concerns, the company stock remained stable on Friday, closing the day at $93.55 after moving up by 0.26%. Asia might have had a bad run for McDonald’s Corporation (NYSE:MCD), but CNBC’s Timothy Seymour has reiterated that the U.S sales also continued to provide a major tailwind for the company.
“The street was expecting terrible same store sales. [..] But they were expecting minus 2.5%, they came in minus 3.3%. The problem here is not Asia, which everyone expected to be bad on the food supply issues, but it was the U.S sales that continued to ‘dog’ this company,” said Mr. Seymour.
One of the reasons to own McDonald’s Corporation (NYSE:MCD) according to, Seymour, is not because of its top line growth, but because of its valuation play in the long run. Increased competition from other players especially on the cheese and burgers where McDonalds has always been a big player continues to raise concerns in the industry.
Growth also continues to be the other challenge for McDonald’s Corporation (NYSE:MCD) according to, Pete Najarian that currently stands at 0%. Countering slow growth in the company is an impressive dividend yield that currently stands at 3.3%. Trying to be healthy with its product according to ‘Fast Money’ crew has also worked to the company’s disadvantage that is now focused on more products instead of paying more attention to high margin core products.
“The problem is growth and anytime in this market, right now people look for a stock, they want to see growth. If they don’t have growth they better have a heck of a dividend which they do, 3% is not bad right now in this market but they have zero-growth,” said Mr. Najarian.