MCD is expensive and should be avoided due to slow growth and lack of cheap pricing in the current interest rate environment.

There are many comments about McDonald's. When there are many comments, it also means that the stock has fallen, that the price-to-earnings ratio is becoming attractive, and that dividends are becoming higher.

I have discussed McDonald's a few times already, probably once a year. So, we need to see where we stand now in terms of the returns side.

For comparison purposes, McDonald's has already been analyzed. Here it is. I will add it here to the latest discussions when we also have the video link. So, you can continue from there as well, but let's move on to McDonald's.

Now, if we look at McDonald's dividend stock, the dividend payout ratio is 100% . If the dividends grow by 5%, and if we take a final multiple of 25, which means a dividend yield of 4%, then the intrinsic value is less than 200.

If we are more optimistic, by 5%, but are satisfied with a dividend yield of 2% or say 2.5%, then McDonald's is fairly valued .

However, if you are more pessimistic and say that you want a 5% dividend yield, then the current value is very far from the current share price . This would be a value investment scenario.

So, from this perspective, I can be a little bolder and put 15 here, and then the present value of the value investment there would be around 115, 16.

So, at the current levels, we are far from the margins of safety, far from anything. The stock price was much higher at the beginning of the year, but keep in mind that everyone at the beginning of the year was expecting interest rates to fall . This is the key when it comes to McDonald's.

Interest rates did not decrease. The 10-year Treasury bonds are worth 4.77. When you compare McDonald's 2% return, McDonald's is not attractive at a share price of 300.

They need a higher return. The stock price needs to go down. At that time, when interest rates were at 2%, a 2% dividend yield from McDonald's was acceptable. Now, one might need a 5% dividend yield from McDonald's.

This is also why the stock has practically not achieved much over time. If we look a little at the business, yes, it is growing by 5% with a few buybacks, and profits are growing by 6% thanks to those buybacks. So, nothing exceptional.

They may find new ways, but it is unlikely they will grow more than single digits during a single day of the financial markets.

As you can see here, the franchise system is good, but growth is slow over time, and nothing spectacular. If we go back to 2019 and compare it to now, well , growth of a few percentage points , that's what McDonald's offers.

They were slightly better in terms of earnings per share due to buybacks, then slowed down, and now their focus is more on dividends. Therefore, this is a game related to interest rates. The dividend yield is still relatively low.

Of course, if interest rates fall, you will make gains of 20-30% on top of dividends.

If interest rates remain the same, McDonald's stock will fall even if the company is performing well. From that aspect of the evaluation , we can add it to our box just for fun.

Then, if the stock price falls due to its defensive nature, we can then move it, depending on the price, towards the buy box.

Peter Lynch said in his book: "Avoid slow-growing companies if they are not priced very cheaply." McDonald's is not priced cheaply. McDonald's is expensive. Avoid it.