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Investors aren't lovin' it, but they aren't absolutely hating it, either. In the third quarter, McDonald's served up its second consecutive set of disappointing results and warned of more pressure to come. Net income dropped 3 per cent to $1.5-billion (U.S.) from the same period a year ago, while revenues slipped only marginally to $7.15-billion. That follows a 4 per cent year-over-year drop in net profit and flat revenues in the second quarter.

With more than two-thirds of its revenue coming from outside the U.S., McDonald's has been hit by the faltering global economy. Meanwhile, competition is heating up at home as Burger King, Wendy's and Taco Bell, owned by YUM! Brands, are luring customers by rolling out some of the same strategies that have helped McDonald's to prosper. Burger King now serves chicken wraps alongside Triple Whoppers, and "premium blend coffee" is poured at some Wendy's outlets. And the cost of commodities is high.

With all of that to swallow, some indigestion from the McStellar stock performance of recent years is no surprise. McDonald's shares topped $100 in January, more than double their 2008 low. This year's rumblings have siphoned off 12 per cent, including Friday's 4 per cent decline. At $89, McDonald's trades at 17 times this year's earnings. That is below Starbucks (26 times) and YUM! (21 times), which have higher projected growth rates, but still no value meal.

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McDonald's has some leeway, particularly in uncertain times, as it is viewed as big and stable. (Shares in younger and scrappier Chipotle Mexican Grill, for instance, fell 15 per cent on Friday on warnings of slowing traffic; they are down almost 30 per cent in 2012.) The world's largest restaurant chain also carries a dividend yield of more than 3 per cent. But any more bad news and more McDonald's investors might just get hungry and start looking elsewhere to satisfy their appetite for stability.

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