McDonald’s Promises Investors 20% Higher Returns

The company’s CFO said, “Our 3-year cash return target is based on several activities including the significant free cash flow generated from our operations, as well as the use of cash proceeds from our debt additions and refranchising activity.”

Blue chip stocks took some lumps Wednesday, and McDonald’s led the Dow Jones Industrial Average lower. Perhaps investors wanted more and that’s what weighing on the price.

What else could McDonald’s have done with its cash flow? The company could have taken on a little more responsibility for the charges it imposes on its franchisees in exchange for franchisees boosting wages for McDonald’s low-paid workers.

Or if it couldn’t bear doing something so radical, it could have used the cash to try new menu items or store changes that would boost the chain’s lagging sales in the United States. But that would have required someone at McDonald’s to acknowledge that everything is not just super at the company.

Shares of McDonald’s stock were down about 0.8% in the mid-afternoon on Wednesday, at $101.56 in a 52-week range of $92.22 to $103.78.

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