Buy McDonald's Corp

01/13/2009 3:41 pm EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

What do investors want? Egg in their McFlurry? The company keeps delivering but analysts don’t seem to get it. First quarter comparable sales climbed 4.3%. Pretty good for a global recession. Operating margins climbed another 1.5 percentage points. And yet McDonald’s (MCD) shares went nowhere. Why? A strong dollar, which depressed reported revenue from overseas, and the refranchising of some company-owned stores cut revenue 10% from the same quarter in 2008. (Refranchising takes sales out of the company’s revenue line and substitutes lower rent and royalty income.) Oh, well, I still continue to collect a dividend yield of 3.5% while I wait for the world to see these shares as I do. As of June 30, I’m leaving my target price at $72 a share by March 2010.

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