Top picks 2012: McDonald's
Recession-resistant fast-food company has appetite for growth.
By Jim Powell, Global Changes & Opportunities Report
My top pick for 2012 -- and a promising new addition to our list of blue chip stocks that have good long-term track records -- is McDonald’s (MCD).
I have been trying to buy the stock for quite some time, but the price was always just out of reach. Thanks to the recent market scare, the company looks more attractive.
McDonald's looks especially good when you compare its performance to the stock market. During the huge plunge the Dow took in early 2009, McDonald's barely wiggled.
That doesn’t mean the company is impervious to a decline, but it clearly has a history of resisting market scares.
McDonald's is undoubtedly familiar to investors because it has outlets in every city. The company is also spreading throughout the world.
To date, it has nearly 33,000 restaurants in 117 countries. Just as importantly, the company has many new markets left to cover, and many additional opportunities in countries where it already does business.
One of the reasons for McDonald's success is its products are affordable luxuries that are resistant to economic downturns. The company is also much bigger than its competitors and its margins are higher.
In addition, McDonald's is a marketing genius. Just try to drive past a Mickey's with a carload of kids. It's nearly impossible. They want the food, the toys, and the play area -- and that's true all over the world.
McDonald's price-to-earnings ratio is 19.4 and the yield is currently 2.90%. The company has paid a dividend every year for 35 years. I think the stock will continue to be an excellent long-term performer.
Steven Halpern's TheStockAdvisors.com offers a free daily review of the favorite stock ideas of the nation's top financial newsletter advisors.
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