McDonald’s could follow Yum’s path

Article Excerpt

McDonald’s recently announce that it is considering selling or spinning off part of Dynamic Yield, a software firm using artificial intelligence to boost customer sales. A successful IPO could also prompt McDonald’s to consider spinning off more of its businesses, such as its international operations. That could unlock more value, particularly in light of Yum Brands’ successful spinoff of its Chinese operations (Yum China) in 2016. Yum has gained 80% since the split, while Yum China has soared 155%. MCDONALD’S CORP. $224 is a buy. This original fast-food giant (New York symbol MCD; Consumer sector; Shares outstanding: 745.6 million; Market cap: $167.0 billion; Dividend yield: 2.3%; Takeover Rating Target: Lowest; www.mcdonalds.com) creates value for investors through its 39,200 restaurants in 120 countries. McDonald’s continues to sell company-owned restaurants to franchisees. That adds value for investors by freeing McDonald’s from maintaining and upgrading these outlets. As part of that plan, in 2017 the company sold 80% of its chain in China (with 2,700 locations) to a group led by…