McDonald’s
The legacy fast-food heavyweight is a solid pick when the economy goes south, and it is among the safest large-cap restaurant plays. McDonald’s Corp. (NYSE: MCD) operates and franchises McDonald’s restaurants in the United States and internationally.The company’s restaurants offer hamburgers and cheeseburgers, chicken sandwiches and nuggets, wraps, fries, salads, oatmeal, shakes, desserts, sundaes, soft serve cones, bakery items, soft drinks, coffee, and other beverages, as well as a breakfast menu, including biscuit and bagel sandwiches, breakfast burritos, hotcakes and other sandwiches. As of December 31, 2021, the company operated 40,031 restaurants.
McDonald’s earnings jumped a strong 19% a beat estimates in the most recent period. Revenue rose 10% to $5.67 billion, also topping forecasts. In addition, same-store sales, which is a huge metric for the company, jumped 11.8%. While that number represented a big drop from prior quarters, it was much better than gloomy Wall Street expectations. U.S. comparison rose 3.5%, barely eclipsing the consensus target.
Shareholders receive a 2.20% dividend. UBS has a Wall Street leading $290 target price and McDonald’s stock has a $281.78 consensus target. On Monday, shares traded at $248.65.
Merck
This remains a leading health care stock for conservative investors. Merck & Co. Inc. (NYSE: MRK) offers therapeutic and preventive agents to treat cardiovascular issues, type 2 diabetes, asthma, nasal allergy symptoms, allergic rhinitis, chronic hepatitis C virus, HIV-1 infection, fungal infections, intra-abdominal infections, hypertension, arthritis and pain, inflammatory, osteoporosis, male pattern hair loss and fertility diseases.
The company also provides neuromuscular blocking agents for use in surgery, anti-bacterial products for skin and skin structure infections, cholesterol modifying medicines, non-sedating antihistamine and vaginal contraceptive products.
Investors receive a 3.14% dividend. The Goldman Sachs target price of $101 compares with a consensus target of $95.73 and a recent share price of $87.60 for Merck stock.
While the Dow Jones industrial average and the S&P 500 are not technically in a bear market like the Nasdaq and the Russell 2000, which are both down over 20% for 2022, the proverbial writing is on the wall. Nervous investors should shift capital away from momentum and high-beta stocks to these top stocks. While they too could trade down in a landslide bear market, they will hold up much better than stocks that carry higher risk metrics.
Originally posted at 24/7 Wall St.
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