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The Best Stock Ever Made...

December 27, 2011 3:52 PM EST
McDonald's (NYSE: MCD) may be the best stock ever made.

The company performs well in good and bad economies, grows earnings in the low-to-mid teens, and pays a fat dividend that has been increased every year for at least 25 years.

McDonald's is the best performing stock in Dow Jones Industrial Average so far in 2011, gaining 30.5 percent as of Friday's close. With only three trading days remaining, the stock will likely retain this title as IBM (NYSE: IBM) is the next highest at 25.9 percent.

Earnings this year are expected to be $5.23, up 13 percent from 2010. Next year, earnings are seen at $5.73, up 10 percent.

With a dividend hike in September, McDonald's pays an annual dividend of $2.80 per share, yielding 2.8%.

Contrarians will question how McDonald's can continue to outperform. Those with this view should just look around themselves. In a slow-growing global economy, McDonald's is in the sweet spot. Don't expect this or the resultant stock performance to change any time soon. Also, in a low yield environment the fat dividend provides a place for investors to hide.

Another 30.5 percent gain in 2012 would put the stock price north of $130.

"I'm Lovin’ It!"


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