"Mega cap tech stocks have continued to be the key growth engine for the U.S. economy. For many young investors that started investing after the great financial crisis, this has been the way it's been for as long as can be remembered. That said, the reality is that we're living in a much higher valuation environment today than we've seen in many years. And it's also true that over the very long-term, valuations will eventually revert toward some sort of equilibrium level."
"McDonald's has seen its revenue and growth slow to the low- to mid-single-digit range in recent years, as a number of key headwinds face this stock. Most importantly, McDonald's has grown to an absolute behemoth in the world of fast food stocks. Second, the rise of GLP-1 drugs and a greater focus on dieting from this generation has investors concerned about the future growth prospects for a company that can no longer be considered a growth stock."
Mega-cap technology stocks have driven U.S. economic growth and produced an unusually high-valuation environment. Long-term valuation reversion remains a risk that could pressure growth-oriented portfolios. Some of the largest companies now trade at multiples once reserved for smaller growth names, prompting searches for defensive alternatives. McDonald's shows a lumpy but consistent upward price trend, with revenue and growth slowing to low- to mid-single-digit rates due to scale and diet-related headwinds. McDonald's offers highly stable cash flows and earnings, trades at reasonable multiples, and retains future growth potential in markets outside North America.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]