McDonald's: The Best Stock in the Dow Bets on Baguettes


Pulp Fiction gave the world the "Royale With Cheese" in 1994. Now 18 years later, McDonald's (MCD) is giving the world -- or at least the French -- something not of Hollywood, but something real and long overdue: The McBaguette.

That's right. McDonald's burgers on a baguette, coming to an arrondissement near you. The Wall Street Journal reported Friday that the fast-food behemoth is continuing to hone its ever-growing international menu, this time by giving the French something that's almost as associated with their culture as the beret.

According to the WSJ, McDonald's will start selling the new sandwich in April at more than 1,200 restaurants. Said baguette will have the burger along with "French-made Emmental cheese and mustard," the paper reports. Maybe that alone won't get you to travel from Des Moines to Marseille, but if you happen to be on that side of the Atlantic in the next few weeks, why not give it a go?

For McDonald's, the McBaguette continues what has been an extraordinarily prosperous move beyond the borders of the U.S. If you don't follow the business press, it's easy to think of the burger chain as quintessentially American, but more than half of the roughly 33,000 Golden Arches locations are not in the U.S. Of those, almost 7,000 were in Europe at the end of 2010, while north of 8,400 were in the Asia-Pacific, Middle East and Africa, and close to 1,900 were in Latin America. In total, they can be found in 119 nations.

Widespread global adoption of McDonald's, helped by the company's ability to adapt to the tastes of local markets, has paid off. Revenue went from $19.1 billion in 2005 to $24.1 billion in 2010, and net income rose from $2.6 billion to $4.9 billion. For an even broader perspective, franchised sales, which the company doesn't record as revenue, grew from $38.9 billion to $61.1 billion. (Have a look at the financials here.)

Investors have been rewarded with big growth, too. For instance, if you had bought one of the other current members of the Dow Jones Industrial Average (^DJI) five years ago, any stock you picked would have trailed McDonald's growth. It's up more than 100% in that time, and the only company among the 30 Dow components that's close to matching its performance during that frame is IBM (IBM).

Additionally, it's been friendly to stockholders by raising its dividend, currently paid at a quarterly rate of 70 cents per share, every year going back to the 1970s.

This past December, Business Insider took a look at the McDonald's juggernaut and what exactly has worked for Ronald & Co. The article rightly points out that not every menu creation has been a smash, but McDonald's has gotten enough correct to prove it's not just about the Big Mac and large fries -- not that there would be anything wrong with that if it were the case. It has quite simply had the kind of growth that most companies would be extremely happy with, both on the store side and the sales side.

We all know McDonald's isn't for everybody. It has fought allegations it's making us all obese. It was taken to task in "Super Size Me" and "Fast Food Nation." It's been sued because of what's on the menu. San Francisco went on the attack against the Happy Meal. And has it really been more than 10 years since a French farmer -- who probably won't be in a rush to try the McBaguette -- took out his frustrations on a local McDonald's?

But for those who do like the Quarter Pounder, the shakes, the McRib, a three-year-old McNugget that might, stress might, resemble George Washington, or the share price, McDonald's is a winner. After all, more than 60 million customers a day can't be wrong, can they?

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