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If you're trying to get your head around some stock strategies for the upcoming fall trading season, you might want to consider dividend yields. Volatility could increase since we've had such a run-up in many equities, so thinking about payouts is probably advisable.
I was looking around for some higher-yielding blue chips and became interested in McDonald's (NYSE: MCD). As of last Friday's closing price, McDonald's yields almost 3.6% on an annual basis. It pays out 50 cents per share per quarter according to its corporate website.
McDonald's is what I would call a comfortable stock. But please keep the following in mind: you should never be absolutely comfortable with any equity. Stocks can go down without warning at any time. Being associated with a big, iconic business doesn't matter whatsoever. Still, let's be honest: McDonald's has a fair amount of brand equity (an understatement, to be sure), people use it on a daily basis (whether they should or not), and the dividend is certainly safe.
But McDonald's hasn't done as well as other companies in 2009. It's down since the beginning of the year, and if there was a recent pullback in the share price since the stock went a little beyond $60 near the start of June. So, there could be room for a little capital appreciation. It does have a lot of strong competition, obviously. Burger King (NYSE: BKC), Wendy's/Arby's Group (NYSE: WEN), and Yum! Brands (NYSE: YUM) all go after the same consumer. Even so, McDonald's will always be a significant player in this space.
McDonald's is not guaranteed to grow fast. Louis Navellier recently rated the stock a hold. Nevertheless, I think Mickey D's is worth a round of due diligence at this point.
Disclosure: I don't own any company mentioned; positions can change without notice.
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