Coronavirus Doesn’t Hurt McDonald’s at All

If the COVID-19 outbreak has prompted people to worry about public places, it has not affected a company that is among the largest owners of retail locations where people congregate in the United States and overseas. McDonald's Inc. (NYSE: MCD) shares have handily drubbed the Dow Jones industrials, of which it is a component, and it is among the best-performing of the 30 Dow stocks.

The drop in the Dow has been crippling for investors so far this year. Even with a recent furious rebound, it is down 6.43% so far in 2020 to 26,703.32. McDonald's, on the other hand, is up by 10.37% to $218.11.

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The rise is in the face of news that events in public places have been canceled from Italy to Thailand to Japan. Some large sporting events have been played in empty stadiums. Conferences in the United States have been canceled, including large ones by Microsoft and Google. Presumably, cancellations of this kind of event in the United States will spread as the footprint of the coronavirus expands.

In few places do workers touch food as much as at a McDonald's restaurant. The virus lives on surfaces for several days. Workers or customers can be infected for days before symptoms appear. McDonald's facilities are very small compared to conference centers and stadiums, which would seemingly make the spread of a virus more likely.

Why then has McDonald's stock done so well under the circumstances? Its overseas footprint should not help it. The company shuttered 300 stores in China due to the outbreak. Presumably, that will happen in other hard-hit countries as well. Its domestic footprint should not be operated any differently as worry grows in American cities and towns.

So, what is the explanation? For now, there does not appear to be one.

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