Is McDonald's Still a Good Stock to Buy in 2026?
Is McDonald's Still a Good Stock to Buy in 2026?
David Jagielski, CPA, The Motley FoolMon, August 10, 2026 at 4:01 PM UTC
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Key Points -
McDonald's reported comparable sales growth of just 1.3% in Q2.
The business has grown modestly in recent years.
It continues to offer an attractive dividend, which pays more than double the S&P 500 average.
10 stocks we like better than McDonald's ›
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McDonald's(NYSE: MCD) is a leader in the fast-food industry, and it's an iconic brand all over the world. The challenge, however, is that when a business reaches a massive size, it becomes much harder for it to grow quickly. And the company's recent results highlight that, as they were fairly modest.
Can McDonald's still be a top stock to buy right now, or are its best days behind it?
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Image source: Getty Images.
Comparable sales were light in the company's most recent quarter
Last week, McDonald's reported its latest quarterly results for the period ending June 30. The numbers weren't great. While its total sales rose by 5% year over year, its comparable store sales growth rate was much more modest, coming in at just 1.3%. And in the U.S. market, it was just 0.8%.
Comparable store sales look at how much revenue the company is generating from existing locations versus the same locations in the prior-year period. Thus, it's reflective of the organic growth the business is generating, and it excludes the boost it gets from opening new stores.
What's concerning is that in April, the company expanded its value offerings, including the launch of a new under $3 menu, and that hasn't shown to be a huge catalyst, at least not in its early stages, anyway. At a time when consumers are looking to save on anything and everything, it's a move that investors may have expected to be a catalyst for the fast-food business. But that hasn't proven to be the case at all.
McDonald's stock can still be a good buy, but it may not be ideal for growth investors
McDonald's has a highly profitable and scalable business. But generating meaningful, organic growth may prove to be a challenge in a highly competitive fast-food industry. Rising prices in recent years don't make things any easier, either.
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The stock can still be a solid option for income investors as it yields 2.7%, which is a far higher rate than the S&P 500 average of only 1.1%. But for growth investors, there are many other, better growth stocks to buy than McDonald's. Last year, its annual revenue totaled $26.9 billion, which rose by less than 4% from the previous year. It may still generate modest growth in the long run, but growth investors may be underwhelmed with its performance. In the past five years, the stock has risen by just 16%, while the S&P 500 has increased by 75% in value.
Should you buy stock in McDonald's right now?
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David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.
Source: “AOL Money”
