Despite its massive size, McDonald's (MCD, news) continues to cook up great results for shareholders -- most recently in July, when the company posted quarterly results that included a 16% revenue increase and a 15% rise in earnings.

The stock has outperformed the market nicely, adding 17% so far in 2011 and about 45% since January 2010. The broader market is up just 10% in that period.

That's in part because more than half of McDonald's revenue comes from outside the United States, where the company still foresees big growth. Same-store sales climbed 5.6% globally in July.

That international exposure is slso good news if a U.S. default comes to roost. With its large cash flows, the company will have the resources to continue to innovate and experiment with new products, such as its recent lemonade concoction, which has juiced sales this summer.

That reliable revenue stream also throws off a plump dividend, which yields 2.7%. Getting paid twice with McDonald's stock is something investors should be pleased about.

Lest you think McDonald's already has seen its pop and is going to run out of momentum, the stock appears to be fairly valued. The company still has a fairly modest forward price-to-earnings ratio of 15.7.


If you're looking for another domestic consumer powerhouse with an emerging-market footprint, PepsiCo (PEP, news) is a good choice. The company reported $6 billion in net income during the past four quarters, making it very entrenched. But management remains aggressive in its plans to increase sales overseas.

In the latest quarter, beverage volume growth increased 13% in China, 17% in India and 15% in Turkey. That potential cannot be overlooked, especially considering that global consumer spending isn't all it's cracked up to be. Pepsi and other companies that are tapping into underdeveloped regions rather than relying on Europe and the United States could be the market leaders in the months ahead.

Beyond these brisk drink sales abroad, there are plenty of foodstuffs that will keep Pepsi's revenues booming at home, even in tough times. Brands such as Quaker Oats and Lay's provide a stable revenue stream and a good foundation for the company.

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Pepsi shares took a tumble after the company released second-quarter financial results and disappointed Wall Street with its outlook. But the sell-off might be a buying opportunity. Immediately after the July 21 earnings report, analysts at UBS issued a "buy" rating on the stock, with a target of $79. Stifel Nicolaus also recommended the stock, with a $75 price target. The stock today is trading at around $64.

The final selling point is the tremendous income potential of PepsiCo. The company has paid a dividend since 1952 and in May raised its dividend for its 39th consecutive year. Over the past five years, the dividend has grown by an average of 12.6% -- a sign of stable income if ever there was one.

Bargain blue chips
CompanySectorDividend yieldForward P/EYTD change
AT&T (T, news)Telecommunications6.0%11.1-3.8%
Cisco Systems (CSCO, news)Networking equipment1.5%9.6-21.8%
Wal-Mart Stores (WMT, news)Discount retail2.7%10.8-2.4%
McDonald's (MCD, news)Fast food2.7%15.717.3%
PepsiCo (PEP, news)Beverages, snacks3.2%13.2-1.8%

This article was reported by Jeff Reeves for InvestorPlace.