Highland Capital Management Boosts Stake in McDonald’s by 70.5%

Highland Capital Management LLC has significantly increased its investment in McDonald’s Corporation, raising its stake by 70.5% in the third quarter of this year. According to its latest 13F filing with the U.S. Securities and Exchange Commission (SEC), the fund now holds 7,729 shares of the fast-food giant after acquiring an additional 3,196 shares during the period. As of the recent filing, Highland’s holdings in McDonald’s were valued at approximately $2,349,000.

Several other institutional investors have also adjusted their positions in McDonald’s. For instance, Vanguard Group Inc. increased its stake by 1.3% in the second quarter, now holding 71,331,031 shares valued at about $20.84 billion after purchasing 921,936 shares. Likewise, State Street Corp raised its ownership by 0.8%, owning 34,828,352 shares worth $10.18 billion after acquiring 272,139 shares.

Another notable investor, Geode Capital Management LLC, increased its holdings by 1.7%, bringing its total to 16,828,420 shares with a combined value of $4.90 billion. Norges Bank also entered the fray, purchasing a new stake worth approximately $2.78 billion. Additionally, Laurel Wealth Advisors LLC dramatically escalated its position by 29,382.3%, acquiring 5,737,548 shares valued at around $1.68 billion. Collectively, hedge funds and institutional investors now hold 70.29% of McDonald’s stock.

Analysts have been active in updating their ratings for McDonald’s shares. Truist Financial recently reduced its target price from $360.00 to $350.00, maintaining a “buy” rating. Other firms, including Weiss Ratings and BMO Capital Markets, have reaffirmed their “buy” and “outperform” ratings, respectively. Currently, eleven analysts recommend buying the stock, while sixteen suggest holding, and two rate it as a sell. The consensus rating stands at “hold” with a price target of $324.57 according to data from MarketBeat.

Recent Financial Performance

On the trading front, McDonald’s shares opened at $310.61 on the previous Friday. The company boasts a market capitalization of $221.20 billion, a price-to-earnings (P/E) ratio of 26.50, and a beta of 0.52. Over the past year, the stock has fluctuated between a low of $276.53 and a high of $326.32. The fifty-day moving average price currently stands at $308.02, while the 200-day moving average is $304.06.

In its latest quarterly earnings report, released on November 5th, McDonald’s reported earnings per share (EPS) of $3.22, missing analysts’ expectations of $3.33 by $0.11. The company’s revenue for the quarter amounted to $7.08 billion, slightly below the anticipated $7.10 billion. Despite a negative return on equity of 280.89%, McDonald’s net margin stood at 32.04%. Revenue increased by 3.0% year-over-year, compared to the previous year’s revenue.

Dividend Increase and Insider Transactions

In a positive development for shareholders, McDonald’s announced a quarterly dividend of $1.86, paid on December 15th. Stockholders recorded on December 1st received this dividend, marking an increase from the previous $1.77 per share. This translates to an annualized dividend of $7.44 and a yield of 2.4%. The dividend payout ratio is currently 63.48%.

In related news, Joseph M. Erlinger, an insider, sold 3,195 shares on November 14th for a total of approximately $977,094.90. Following this transaction, he retained 6,088 shares valued at around $1.86 million. Similarly, Desiree Ralls-Morrison, Executive Vice President, sold 2,486 shares on December 16th for about $795,520, reducing her position to 6,268 shares worth approximately $2.00 million. Over the past three months, insiders have sold a total of 42,516 shares valued at approximately $13.04 million, with insiders owning 0.25% of the company’s stock.

McDonald’s Corporation remains a dominant player in the global quick-service restaurant sector, recognized for its iconic menu items such as the Big Mac and Chicken McNuggets. The company continues to expand its reach through both company-operated and franchised locations, utilizing various sales channels, including dine-in, drive-thru, and digital platforms.