McDonalds (MCD)

Very well managed. Have reinvented themselves a couple of times in their history and have done a great job of it. Had some headwinds in terms of same-store sales growth but they have motored on and have done well from a stock price standpoint. A little rich at 18-19 times earnings but still a very good franchise.

Have gone through a big transition of all their stores and are starting to come back a little bit. Feels there is some momentum in this. Surprised on the upside in their last earnings release.

Very great job. People want to own them. Impressive growth over the years. Tempered down over the last little while. The story is positive. You probably won’t get hurt but she thinks the multiple has limited expansion potential. There are better opportunities out there. Others in the space are trading at 10 times earnings.

Last February he saw their first crack when their same-store sales started to falter. They’ve had a continuation of good, bad, good, bad results in terms of same-store sales. Have some pressure on input costs and commodity costs. Recently made some management changes in their domestic operations.

Likes this one. Has done a great job of new menu innovation and pricing. Had same-store sales pull back but feels the US consumer psyche will be positive.

Have done a great job with product innovation. Same-store sales were negative or very weak last quarter but recently announced numbers for November, which were encouraging. About 40% of earnings actually come from Europe. Competition in the US is always quite intense. Emerging markets is a target that they are aiming to grow in. Very attractive yield. If you are going to buy it, she would buy it now with its pull back. (See Top Picks.)

(Market Call Minute.) Off 10% over the last year. Decent dividend yield. Same-store sales growth is positive. (See Top Picks.)

A little pricey in here. The whole fast food market is undergoing some real challenges. Yum brands reported very slow sales in China. Taco Bell is doing ok in the US but not last year and MCD did well last year but not this year. She’s not selling Yum, and prefers it to MCD.

Had some poor same store sales and issues with managing commodities. At these levels you get a good dividend and they can increase it. Good international growth. McCafe business is taking off.

You don’t often get a dividend champion that you can buy on this type of pull-back. 3.7% yield. Paid or raised dividends for about 36 years. He is buying it because it has pulled back enough to warrant buying it, not because of the fiscal cliff and people will have to eat. North America did very well due to their coffee. Europe pulled them back.

$84.92 is reasonable but you have to look at the overhangs. The highly competitive value menu has to be looked at. This is clearly the market leader. Excess amount of cash flow to put WiFi in their restaurants. He would look for some level of support in the low eighties. You have to be careful of input cost inflations – bread, eggs and beef. They have been good in the past at passing increasing costs through to the consumer. Dividend income is a great way to mitigate risks.

(Top Pick Nov 29/11, Down 8.00%) He was stopped out in March. Most recent revenue numbers were down across the globe for the first time in 9 years. It is not the time to step into it. Prefers YUM brands.

Great company and a wonderful franchise. Up until about February they were doing very well and then started to see same-store sales slide and raw material inflation eating the margins. Doing okay, but there are some cracks in the armour and there has been some slide in the stock price but not enough for him. They are still trading in the high teens in terms of multiple. International sales were growing at about 1.9% and domestically at 1.2%. He would prefer to see it in the low $80’s.

It is clearly essential that restaurant companies continually update their menus, add products and go with the flow. This company has been a master at this. It will benefit from a pickup in the economy plus they will have growth from emerging markets. Great, long-term hold.

Great company and they were sort of priced that way up until early this year and then came out with same-store sales that were a little weak and have had a spotty record since then in terms of an ability to grow on an organic basis. Would prefer it in the low $80’s, which would be a good opportunity.