McDonald’s Corporation (MCD) is the premier fast food restaurant company with one of the most recognizable brand identities in the world. MCD has a dominant international presence in every major country with its European segment contributing nearly 40% to the revenues and other regions such as the US and APMEA and other countries contributing 33%, 21% and 6% resp.
MCD provides a dividend yield of 2.6% with a dividend payout ratio of 48%, which compared to the the industry averages of 1.54% and 31% respectively, is a winner to say the least. With an operating margin of 31% and net profit margin of 20%, competitors such as Wendy’s (WEN) with under 6% and negative net earnings margin, in the dust. A 5 year EPS growth rate of 17.75% and a low price earnings multiple of 18 times makes MCD a solid bargain.
Pfizer Inc. (PFE), the name behind some of the best blockbuster drugs of our time including Lipitor, is a global pharmaceutical big time player. The stock has already recovered substantially after taking a tumble due to bribery charges and patent expiration for its drug Lipitor, however, with the current pricing level of under $20, this is once in a lifetime buy opportunity that won’t last long.
With a market capitalization of $154 billion, PFE provides a dividend yield of 4% and a remarkably healthy payout ratio of 60%, which beats other industry giants out, all of which are suffering the same research deadois no doubt better than the industry average of 2.83% and 39.67% respectively. An expected PEG ratio of nearly 2.5 could simply not be any better, especially given a solid liquidity position and nearly 7 times interest coverage.
Intel Corporation (INTC) is the semiconductor elephant that leads the industry’s global market share since at least a decade, frequently with almost double the market share of the next best competitor, currently Samsung. With a recent acquisition of McAfee, INTC has admitted yet another arrow in its quiver, aimed at enhanced product differentiation and market access. The stock trades above the $20 mark, with a very narrow 52 week band of less than $6, indicating low volatility.
INTC reported a year on year quarterly revenue growth of 28.2%, industry average growth being negative in the last year. In addition to the double digit growth rate, INTC provides a dividend yield of 3.41% and dividend payout of 30.3% and a return on investment is at 23.12%, which is excellent as compared to the industry average of 2.38%. The price is currently at the bottom of the 5 year barrel, making it a solid bargain, considering a 5 year EPS growth rate of 7.5%, when the industry is in the red.
Alcoa Inc. (AA) is an aluminum mining operator in every major consumer market including the United States, Australia, Brazil and China, with the United States contributing almost half of total sales. The under $10 stock belongs to the world’s second largest aluminum company, which registered an EPS growth rate of a whopping 163% from last year, with a price earnings multiple of around 9 times.
AA recorded a year on year quarterly revenue growth of 21.4%, with both dividend yield and payout falling below industry average, albeit still healthy 1.35% and 11.9%. Currently trading at around $8-$9, the price earnings is the lowest it’s been in the last five years, not to mention that it boasts of above average interest coverage ratio. Although the debt ratio is higher than what some in the industry may consider ideal, the interest coverage ratio is also well above the industry average.
I asked 15 non-drinkers to name the first whiskey that came to their head, and 80% of them named a Johnny Walker brand. This is the power of Diageo PLC (DEO) a leading liquor market player offering brands ranging from classic Johnnie Walker to Captain Morgan with eight of its brands in the world’s top 20 liquor brands. The world’s largest producer of premium spirits saw growth, both in volumes and sales in its Asian and International market segments, which contributed about 28% and 12% to the net sales respectively.
A $62 billion enterprise value DEO, provides a lucrative dividend yield of 3.1% which beats down both the industry average of 1.39% and its competitors such as Pernod Ricard SA (RI) at 2.1%. the company has managed to grow dividends at over 5% for the last 5 years, which makes the stock a strong buy for retirees. In addition to cash payout, the stock provides a solid return on equity of just over 41%, while the same competitor struggles at just 11%. Feel free to forward this Op Ed and follow our Blog stock market news today
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