Two Services Stocks Are Just So Hot Right Now: Best Buy Co., Inc. (BBY), McDonald’s Corporation (MCD)

Best Buy Co., Inc. (BBY) ended last trading session with a change of 0.11 percent. It trades at an average volume of 4.74M shares versus 3.24M shares recorded at the end of last trading session. The share price of $44.85 is at a distance of 58.05 percent from its 52-week low and down -9.21 percent versus its peak. The company has a market cap of $13.97B and currently has 311.56M shares outstanding. The share price is currently -0.02 percent versus its SMA20, 1.32 percent versus its SMA50, and 15.66 percent versus its SMA200. The stock has a weekly performance of 2.19 percent and is 5.11 percent year-to-date as of the recent close.

On March 1, 2017 Best Buy Co., Inc. (BBY) announced that its Board of Directors approved a plan to return excess capital to shareholders as follows:

  • A new $3 billion share repurchase plan expected to be completed over the next two years; and
  • A 21% increase in the regular quarterly dividend to $0.34 per share, effective immediately.

This updated capital return plan is consistent with the company’s long-term capital allocation strategy to first fund operations and investments in growth, including potential acquisitions, and then to return excess free cash flow over time to shareholders through dividends and share repurchases, while maintaining investment grade credit metrics. The company is targeting a non-GAAP dividend payout ratio1 between 35% and 45%.

McDonald’s Corporation (MCD) recently recorded -0.29 percent change and currently at $127.61 is 17.42 percent away from its 52-week low and down -1.84 percent versus its peak. It has a past 5-day performance of -0.33 percent and trades at an average volume of 3.71M shares. The stock has a 1-month performance of 3.27 percent and is 5.61 percent year-to-date as of the recent close. There were about 820.02M shares outstanding which made its market cap $104.64B. The share price is currently 0.41 percent versus its SMA20, 3.25 percent versus its SMA50, and 7.99 percent versus its SMA200.

On March 1, 2017 McDonald’s Corporation (MCD) unveiled its long-term global growth plan during the Company’s Investor Day event in downtown Chicago. President and Chief Executive Officer Steve Easterbrook and members of the senior management team presented the plan, its financial targets and outlined the initiatives to unlock meaningful growth and increase guest counts.

The growth plan focuses on:

  • Enhancing digital capabilities and the use of technology to dramatically elevate the customer experience
  • Redefining customer convenience through delivery
  • Accelerating deployment of Experience of the Future restaurants in the U.S.
  • Initiating a new 3-year target for cash return to shareholders, and
  • Establishing new financial targets for Sales, Operating Margin, Earnings per Share and Return on Incremental Invested Capital