McDonald’s Corporation (MCD) has endured a difficult year. The year-to-date performance of the stock is -5.13%. McDonald’s opened the year at $118.14 per share, and it is currently trading at $112.08 per share. It reached a high of $131.60 per share on 10 May 2016, and subsequently plunged to $116.30 per share on 27 June 2016. After a series of stops and starts, the trend has been bearish since 22 July 2016. On a positive note, the 1-year target estimate price is $127.32 per share, the dividend is $3.76 and the yield is 3.35%. At its current price, the market capitalisation of McDonald’s Corporation is $95.81 billion. Further, the company has a rather respectable price/earnings ratio of 21.09. On a scale of 1.0 (strong buy) to 5.0 (sell), McDonald’s is comfortably rated at 2.4.

What Are Traders Doing with McDonald’s Stock?

Q3 2016 earnings were released 10 days ago (21 October 2016). The company’s diluted EPS advanced by 7% year-on-year, and this was far better than consensus estimates by analysts. The company’s total revenue came in at $6.42 billion for the quarter. While this was below Q3 2015 figures of $6.62 billion, it topped consensus forecasts by Wall Street analyst of $6.28 billion. International Lead markets proved to be the cash cows for McDonald’s Corporation. Net income amounted to $1.28 billion for the quarter or diluted share earnings of $1.50. This paled in comparison to the figures from Q3 2015 of $1.31 billion and $1.40 respectively. This financial quarter also saw an improvement in diluted share earnings of $1.48. This is largely due to improved operating performance, and bigger gains on sales in restaurant businesses.

On the flipside, earnings in foreign currency impacted negatively on the EPS for the quarter. This amounted to $0.03 for the quarter. According to the CEO of McDonald’s, Steve Easterbrook: ‘Our Q3 results, including our fifth consecutive quarter of positive comparable sales across all segments as well as improved restaurant profitability, are a testament to the progress we are making to satisfy the needs of today’s dynamic customers.’ The company’s operating income (for Q3) rose by 5% from $2.03 billion to $2.14 billion year-on-year. Expenses and total operating costs declined by 6% year-on-year between Q3 2016 in Q3 2015. This amounted to a cost reduction of $0.19 billion. Other disappointing news comes in the form of sales by company-managed restaurants. For Q3 2015 this figure was $4.28 billion, and for Q3 2016 the figure was $3.97 billion.

McDonald’s Shareholders to be paid $0.94 Dividend on December 15, 2016

International lead markets sales increased by 3.3% year-on-year, driven largely by strong growth in Canada, Australia, Germany and the United Kingdom. France was the only market that performed poorly. A notable gain was made in the Japanese market where year-on-year revenues between Q3 2015 and Q3 2016 increased by 17.7%. On 29 September 2016, the BOD for McDonald’s increased the quarterly cash dividend to $0.94 per share, up 6%. The dividend is payable to all McDonald’s shareholders on 15 December 2016. This year marks the 40th consecutive dividend hike for McDonald’s Corporation stock. All in all, the stock is priced right and it is rated accordingly. 4 quarters of positive earnings surprises between Q4 2015 and Q3 2016 bode well for shareholders.