Like the company's sales and earnings, McDonald's stock has performed quite consistently. It made gains every year from 1994 to 1999, often outperforming the S&P 500. In typical classic-growth-stock fashion, most of McDonald's total return has been from capital gains, not income.
Because of their predictable and steady earnings, classic-growth stocks should be less risky than speculative-growth or aggressive-growth stocks. Looking at measures of past volatility, such as the worst three-month return, can give an indication of how risky the stock has been. McDonald's worst three-month return of -16% is significantly better than the classic-growth average.
How Do the Stock's Price Valuations Compare with Those of Similar Firms? >>