McDonald’s is a global brand aristocrat

June 10, 2019

McDonald’s has more than 38,000 outlets in 120 countries, it 69 million customers a day and is the world’s second largest private employer behind Walmart with 1.7 million people on the payroll. McDonald’s is also a dividend aristocrat. Through 2018 it had raised its dividend for 43 years in a row.

McDonald’s is also an example of a multinational with strong brand power. In any market, language and currency, the product, the packaging and the marketing are powerful.

Although the U.S. and Canada are still McDonald’s largest markets, it continues to expand its brand dominance in emerging market where the opportunities are expanding. As economic energy migrates east, McDonald’s is shifting its businesses along with it, increasing its brand strength and reach.

More than 40% of its stores are now in what the company calls high growth markets, notably India, China, South Korea, Brazil, Poland and Russia. Although best known for its hamburgers, McDonald’s serves a wide variety of food which it adapts to local needs and tastes. McDonald’s rapid growth in these markets is an example of how a brand leader adapts to changing conditions.

Using its food delivery experience in Asia as a model, McDonald’s has teamed up with UberEats to deliver food in most markets including the U.S.  More than 10,000 restaurants, greater than one-in-four worldwide, will offer delivery in 2019.

The chain is revamping its stores in Canada and the U.S. to include mobile ordering, in store ordering kiosks and wider pay and pickup services. This replicates what works overseas. It is also moving to a franchise model which pushes decision making down and a quicker response to local tastes. All of this strengthens its brand power.

McDonald’s is a top holding of the Harvest Portfolio Group Inc.’s Harvest Brand Leaders Plus Income ETF (TSX: HBF, HBF.U).

As of May 31, 2019, the ETF held 20 global brand leaders who are the dividend elite, with an average dividend yield of 2.08%. The distributions are paid monthly and payable as cash or through a Distribution Reinvestment Plan (DRIP). The ETF’s management fee is 0.75%.

For more on  Harvest ETF’s click here.

 

The views and/or opinions expressed in the blog are of a general nature and are for informational purposes only. Blog contents should not be considered as advice and/or a recommendation to purchase or sell the mentioned securities or used to engage in personal investment strategies. Investors should consult their investment advisor before making any investment decision.

 

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