Had it not been for a solid fourth quarter, the world’s largest fast-food company, McDonald’s Corp. (NYSE: MCD) would likely have shown no year-over-year profit growth. As it is analysts are expecting full-year revenues to drop more than 3% compared with 2015.
The Wall Street Journal reported Thursday that the company is currently seeking bids for a “significant stake” in McDonald’s Japan unit. The Tokyo-listed subsidiary has a reported market cap of around $3.5 billion, and McDonald’s owns just less than 50% of the shares. The U.S.-based company is shopping a 33% stake in the unit, meaning it would cut its own stake to less than 19%.
Earlier this week the company said it is selling an 80% stake in its China operations to a group that includes a number of Citic subsidiaries and the Carlyle Group L.P. (NASDAQ: CG). According to The Wall Street Journal, the sale would value McDonald’s Chinese business at $2.08 billion. The Citic companies would own a controlling 52% stake in the business and Carlyle, would own 28%. McDonald’s would retain the remaining 20%.
McDonald’s has been selling company-owned stores at a rapid clip over the past two years, with most of the buyers being franchise holders. Large sales like those of the China- and Japan-based variety are likelier to find buyers among private equity firms.
By 2018, according to the Wall Street Journal, McDonald’s expects to shed 4,000 company-owned stores to franchisees and wind up with corporate ownership of just 5% of the more than 36,000 global retail stores under the golden arches.
McDonald’s stock traded up about 0.3% in the noon-hour Thursday, at $121.19 in a 52-week range of $110.33 to $131.96. The consensus 12-month price target is $128.08.
Sponsored: Tips for Investing
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.