McDonald’s Continues To Dominate In The Recession

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McDonald’s (MCD) this morning reported another excellent quarter.  Global same store sales increased 3.8% compared to the year ago period including gains of 2.5% in the US, 5.8% in Europe and 2.2% in Asia, the Middle East and Africa.  That’s some solid sales growth in this environment.  Net Income was up 6% and EPS 10% as they bought back 3.3% of outstanding shares over the last 12 months.  They are going to earn about $4 a share this year so at the current $60 price that’s a 15 multiple on current earnings – not expensive at all.  They also raised their quarterly dividend to 55 cents for a 3.67% yield.  This is a good stock and one that I’m interested in owning in the low $50s.

Notably, McDonald’s stock has only rallied about 18% since the March low – far below the overall move in the S&P.  This rally doesn’t seem all that interested in quality stocks.


Disclosure: Top Gun has no position in McDonald’s (MCD) shares.

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