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MCD Stock Intrinsic Value

Value Investing with Sven Carlin, Ph.D.•Sep 6, 2026

Summary

Sven provides an analysis of McDonald's, focusing on the relationship between the dividend yield and the current interest rate environment. Sven points out that with the 10-year Treasury yield at 4.77%, the McDonald's 2% yield is no longer appealing to investors. Sven notes that while the business continues to grow at a modest single-digit pace, the stock price has not adjusted sufficiently to reflect higher rates.

McDonald's (MCD): Sven argues that the stock is currently expensive and lacks a sufficient margin of safety for value investors. Sven notes that for the stock to be a bargain, the price would need to drop significantly, potentially toward $200 or even $115 to reach a 5% dividend yield. Sven suggests that unless interest rates drop significantly, the stock's upside is limited, making it a "slow grower" to avoid at current levels.

Mentioned Stocks

MCD
Sentiment: SELL

Reasoning: Sven labels McDonald's as an expensive stock to avoid because the dividend yield is uncompetitive compared to the 10-year Treasury yield of 4.77%. Sven calculates that the intrinsic value for a value investor would be around $115 to $116 to achieve a 5% yield, or below $200 for a 4% yield. Sven emphasizes that growth is slow and the stock lacks a margin of safety at current price levels.

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