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Matrix Asset Advisors: 'You Are Getting Paid Nicely While You Wait For A Turnaround At McDonald's'


While McDonald's Corporation (NYSE: MCD) was having its annual shareholders’ meeting on Thursday, David Katz, Matrix Asset Advisors CIO, was on CNBC to discuss why the company is a great buy right now.

Good Deal Of Upside

“We actually bought it after it was down,” Katz said. “If you look at McDonald’s, we think it’s a reasonable valuation, has a great global footprint. It’s paying at a 3.5 percent yield while you are waiting. It’s about 16 or 17 times normalized earnings. We think that Easterbrook is going to fix the business, if they fix the business there’s a good deal of upside both on the operational level, the earnings level and the financial level.”

Easterbrook Will Do More For Shareholders

Katz was asked the kind of changes that he is expecting McDonald’s new CEO, Steve Easterbrook, to make. He replied, “We think there’s going to be lot of blocking and tackling. The CEO did fix Great Britain, he did fix Europe. He understands there’s a sense of urgency. If you look at the company today versus nine months ago with the last CEO, he thought business wasn’t great, but it was sort of a business as usual attitude.”

“The current CEO really is trying to fix things really is trying to shake things up, first with the operations then with the menu and we think ultimately he is going to do more for shareholders on the financial side with more aggressive share buybacks, converting the company owned stores to the franchises. There are lots of things out there and you are getting paid nicely while you wait,” Katz concluded. 

Posted-In: CNBC David KatzMedia


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