McDonald's (NYSE: MCD), whose competitors include Yum! Brands (NYSE: YUM), Burger King (NYSE: BKC), and Wendy's (NYSE: WEN), isn't known for being a part of a healthy diet, no matter how much branding it's done in that area. However, it is known for delivering good earnings. That's why investors probably aren't too worried when it comes to Wednesday, the day that the fast-food behemoth is set to hand off a sack of quarterly numbers at the earnings-report drive-thru.

According to AOL Finance, McDonald's beat the street by a wide margin in the first quarter. The call was for about 70 cents per share which Mickey Dee's beat by a whopping 11 cents. The previous quarters weren't as impressive, but they were solid enough. McDonald's seems to have the game of at least matching expectations down pat, so I am confident that come Wednesday, the company's bottom line will be close to the 86 cents per share that Wall Street is looking for in the second quarter, according to Earnings.com.

If McDonald's makes the number, then it will represent growth of over 20%. Double-digit appreciation is a valuable commodity in this time period. I can't say, though, that McDonald's won't have its challenges cut out for it. After all, inflation is affecting everyone, and fuel prices theoretically could hamper the popularity of the company's valuable drive-thru asset (I used one last evening myself). But McDonald's has that famous dollar menu going for it, so even in tough times, fans of fatty foodstuffs can still afford the oily, heart-clogging grub.

Yum! Brands (NYSE: YUM), which competes with Burger King (NYSE: BKC), McDonald's (NYSE: MCD) and Wendy's (NYSE: WEN), issued its Q2 report on Wednesday. Total revenues increased 12%, and earnings per share jumped 16% to $0.45. According to Briefing.com, Yum! beat expectations by three pennies, but it didn't seem to satisfy the big guns of Wall Street. The stock was down 5% in the after-hours session yesterday.

Some reports indicate that margins are to blame here. It's true, the margins aren't as good as one would like, but the company has nevertheless succeeded in cutting some costs. I see Yum!'s quarter as a very decent one in the context of the current bear market. In fact, the company posted worldwide same-store sales growth of 4%. U.S. comps exhibited a growth rate of 2%. There is opportunity in the U.S. for Yum! in terms of marketing for its Pizza Hut, KFC and Taco Bell brands. Management needs to see if it can increase comps in this territory. International restaurants, including locations in China, continue to do well.

I like Yum! and its long-term prospects, especially for restaurants located abroad. I also like that the dividend saw a great double-digit increase during the quarter, rising by a whopping 27%. Management is therefore signaling shareholders a high level of confidence behind the brands. I'm reticent about putting new money to work in any stock right now, but I think Yum! Brands is worth a place on the watch list and a round of due diligence on a pullback.

Disclosure: I don't own any company mentioned; positions can change at any time.

McDonald's (NYSE: MCD) has always been known for its famous French fries. Interestingly enough, though, it seems to me that the fast-food chain is becoming known these days for its coffee. I never thought McDonald's would invest as much as it has in coffee, but it looks like it's doing the right thing. According to this Bizjournals piece, McDonald's is putting its weight behind a coffee-bar initiative called McCafe. The program is being tested in various locations now and will be available nationally sometime next year.

I love the timing on this. After all, Starbucks (NASDAQ: SBUX) isn't doing so well. Not only is its stock hovering around 52-week-low territory, but the java king recently announced some store closings. That's almost unimaginable. Remember the days when every street corner needed a Starbucks? Yeah, those days are long gone. And I think McDonald's is smart in attempting to expand the brand equity of its coffee-brand portfolio. People need more of a reason to go to the palace of the hamburger-serving clown than just Big Macs these days, since the Big Mac and its various fat-saturated colleagues aren't as popular in these health-conscious times. I'm not saying drinking coffee is an exercise in life preservation, I'm just saying that it's good for McDonald's to focus on less controversial fare.

This significant foray into coffee is arguably a key reason for the company's stellar stock performance over the last few years and its competitive edge against rivals Burger King (NYSE: BKC) and Wendy's (NYSE: WEN). According to the AOL Finance snapshot, McDonald's is very much in the green for every timeframe save for year-to-date, which sees the stock down less than 1%. That's strength. McDonald's is a little below its 52-week high, and it might make for an interesting investment idea. At the very least, you can look forward to its McCafe program.

Disclosure: I don't own any company mentioned; positions can change at any time.

UBS downgraded Verizon (NYSE:VZ) from "buy" to "neutral" and took the same action with AT&T (NSYE:T) according to Briefing.com. The news service also reports that JMP upgraded Sandisk (NASDAQ:SNDK) to "market perform" from "underperform".

General Electric (NYSE: GE) was cut to Neutral from Outperform at JPMorgan, according to 24/7 Wall St. The financial website also reports that Wendy's (NYSE: WEN) waised to Equal Weight from Underweight at Morgan Stanley.

Douglas A. McIntyre

I always love news items like this. According to Reuters, there exists a $175 hamburger. You can find it in New York at a place called The Wall Street Burger Shoppe. Presumably, big traders would be the only ones able to afford it.

Well, for those who would even think to complain about the prices at McDonald's (NYSE: MCD), Burger King (NYSE: BKC) and Wendy's (NYSE: WEN), this $175 burger should put things in perspective. It doesn't sell a lot; the news piece states that the place moves about two dozen in any given thirty-day period. The Wall Street Burger Shoppe mostly sells $4 burgers.

But, really, this $175 burger is nothing more than genius marketing. The owners are obviously not under any illusion whatsoever that they can make a great return on capital by investing in such a pricey offering. All it's meant to do is to bring publicity to the establishment. It's obviously worked. As a way of branding, this goofy pricing scheme immediately differentiates the restaurant's brand from others. In fact, it was the stated intent of the owners to have the most expensive burger in the area. It's also a great differentiator between personalities. I mean, I think you can tell a lot about a person who is actually willing to buy this thing (and, you can certainly infer a lot about the person's net worth).

Wendy's (NYSE: WEN) recently agreed to be acquired by Triarc (NYSE: TRY), parent of Arby's, but that won't stop the company from efforts at innovation before the deal closes.

In a statement, the number three fast food chain announced that it's "introducing a new line of hand-spun Frosty Shakes in three flavors: Vanilla Bean, Chocolate Fudge, and, yes, Strawberry -- a company first."

The company will launch a national ad campaign in June. The Frosty was one of the original Wendy's menu items when Dave Thomas opened the first location in 1969. Since then, the Frosty has become Wendy's best-known item, with annual sales exceeding 350 million.

What can Wendy's do to keep up with the more innovative McDonald's (NYSE: MCD)? Here's an idea: an all-natural Frosty made with real milk.

As Sarah Gilbert recently wrote on WalletPop, our sister site, "Unfortunately, today's milkshake is barely recognizable compared to those of the middle of the century. Most milkshakes consumed by Americans today come from McDonald's, Wendy's or Starbucks; where they are all individually "branded", Shamrock Shake, Frosty, Frappuccino, so that it's clear the milk is but a minor player. Nonfat milk solids, corn syrup solids, guar gum, dextrose, cellulose gum, vanilla. Is this progress?"

An all-natural Frosty could really move Wendy's into the 21st century. They've demonstrated a willingness to introduce new Frosty products, so why not give it a try?

Give Triarc (NYSE: TRY) CEO Roland Smith credit for forthrightness. Less than a month after the company announced it would acquire Wendy (NYSE: WEN)'s -- and well before the deal has even closed -- he wrote a letter to the company's employees saying in effect "Welcome to our conglomerate, you're fired!" to borrow a line from Isadore Barmash's book.

Well, not exactly. Triarc -- which is the parent company of Arby's -- isn't a conglomerate, and his letter had a bit more tact. He wrote: "There will be job cuts at Wendy's. I don't know how to put it any other way and say that I am acting with integrity. We will continue to be truthful with you about these as they come up."

It's a bold strategy. Given Wendy's struggles in recent years, he'll need all the help he can get in making this acquisition work, including strong employee morale. While immediate job cuts might help the bottom line, the impact on the company's remaining employees could make it far from a no-brainer.

Smith is betting that straight talk will pay off, but most employees would probably prefer job security. This letter may lead to a less than friendly welcome when Triarc takes control.

McDonald's (NYSE: MCD) announced its same-store sales results for the month of April Thursday, and the data indicate a healthy fast-food business ("healthy fast food" -- isn't that an oxymoron?).

Global comps as a whole increased 5%. Comps for European locations increased 6.3%, and the Asia/Pacific/Middle East/Africa segment saw a 7.8% rise in same-store sales. McDonald's restaurants in the States increased an anemic 2%. The weak domestic sales really need to be addressed so that they can pull more weight and add to the cool story that is McDonald's.

The stock has been a pretty decent performer over the last several months, rising over 6% over the three-month timeframe, and over the one-month period, it is up over 7%. And the longer-period returns from the past are even more impressive. Imagine how McDonald's stock would perform if management figured out how to get people to visit the U.S.'s Golden Arches more often. I suppose April's performance should be praised since March saw a decline in U.S. comps, as this article makes plain, but that depreciation was the first one in five years, and that says to me that McDonald's needs to be careful.

It's all about the marketing, of course. There are a lot of choices out there -- Burger King (NYSE: BKC), Wendy's (NYSE: WEN) and Yum! Brands (NYSE: YUM) -- so I think promotion of the brand is key. Some will disagree and say that menus and pricing are the big drivers -- they are important, don't get me wrong, but perhaps McDonald's needs to take a cue from Burger King and its campaign with the creepy-king thing -- those commercials are clever. Still, if this comps reports says anything, it says that you shouldn't count the clown out -- McDonald's is a blue-chip stock that is near a 52-week high, and not only is it a great long-term/core holding, but it's also quite possibly an interesting shorter-term idea as well.

Disclosure: I don't own shares in any company mentioned here; positions can change at any time.

McDonald's (NYSE: MCD) may be the big brand name in the fast-food industry, but don't discount Burger King (NYSE: BKC). The King reported its fiscal Q3 numbers on Thursday, and they were pretty regal indeed.

Revenues increased 10%, and earnings per share did even better, rising 20% to 30 cents (that beat earnings by three pennies, says Briefing.com). Now, when talking about retail stores and fast-food joints, the issue of same-store sales always comes up, since it's such an important element to consider (be sure to keep in mind that comps must always be put in an overall context, especially if you are only measuring a one-month timeframe). Global comps increased 5.8% for the quarter, a good showing for Burger King which wants to become a force to be reckoned with around the world. The domestic side of things isn't doing too badly either as comps in the United States and Canada moved up 5.4%. Restaurant margins, however, decreased due to the challenging commodity-cost environment we all live in nowadays. Otherwise, I see these earnings as very positive for Burger King, and I am bullish on the stock.

MOST NOTEWORTHY: Northrop Grumman, Phase Forward and Celestica were today's noteworthy upgrades:

• Cowen upgraded Northrop Grumman (NYSE: NOC) to Outperform from Neutral following the Q1 report based on accelerating growth. Shares were also upgraded at JP Morgan to Overweight from Neutral.
  
• Friedman Billings upgraded Phase Forward (NASDAQ: PFWD) to Outperform from Market Perform following the solid Q1 report and views guidance as beatable.
  
• CIBC raised Celestica (NYSE: CLS) to Sector Outperformer from Sector Performer following Q1 results, citing end markets that look stable.

OTHER UPGRADES:

• JP Morgan upgraded the Consumer Discretionary Sector to Overweight from Underweight.
  
• Wendy's (NYSE: WEN) was raised to Neutral from Sell at Goldman.
  
• Progenics Pharmaceuticals (NASDAQ: PGNX) was upgraded at Citigroup to Hold from Sell.
  
• Merrill Lynch raised Wal-Mart (NYSE: WMT) to Buy from Neutral.

Wendy's (NYSE: WEN) finally sold the company to Nelson Peltz. The price which Peltz company Triarc paid was about $26.78 per share only a 6% premium according to the AP. One of the reasons the firm went for so little may be that there were no other buyers. The Wall Street Journal writes that "The move puts an end to the year-long saga that began when Wendy's first said it would consider a sale last April after Mr. Peltz began pressuring the chain."

Peltz has gotten a very good deal and Wendy's shareholders have not. The chain's current stock price is near its 52-week low. Over the last six months, the company's shares are down about 23% while rivals Burger King (NYSE: BKC) and McDonald's (NYSE: MCD) are up about 5%. Of course, they are the market share leaders and deserve some premium for that.

But if fast food does well, especially in a poor economy when people cannot afford more expensive restaurants, Peltz will have picked up a prize. When a recovery comes around, Wendy's could become a very nice business and the billionaire will look like a genius.

Douglas A. McIntyre is an editor at 247wallst.com.

MAJOR PAPERS:

• Wendy's International Inc (NYSE: WEN), struggling since the 2002 death of founder Dave Thomas, and pressed by investor Nelson Peltz to improve results, will today announce a deal with Peltz, the Wall Street Journal reported.
• The Wall Street Journal also reported that the House Financial Services Committee voted to approve $15B in loans and grants so that local governments can buy foreclosed homes throughout the U.S. Committee chairman Barney Frank said the bill will avoid abuse, including requiring that purchased homes be a minimum 60 days into the process.
• Adding to evidence of a rally in corporate credit markets, the Financial Times reported that Deutsche Bank AG (NYSE: DB) is preparing another big sell-off of its leveraged loans in Europe.

OTHER PAPERS:

• Several e-mails that have been obtained by the New York Post sent between Wall Street banks may prove a serious setback in the fight over the takeover Clear Channel Communications Inc (NYSE: CCU). The e-mails reportedly show the banks, led by Citigroup Incorporated (NYSE: C) and Deutsche Bank, looking to get out of financing the buyout by Bain Capital and THL Partners by offering terms "they know the [firms] won't be able to accept."

Yum! Brands (NYSE: YUM) reported Q1 numbers Tuesday after the bell, and the company came through with double-digit growth on the bottom line. Net sales increased 8%, and earnings per share, adjusted for special items, increased 19% to $0.42.

There's a lot of cool stuff in this report that shareholders will view in a positive light. The international story for Yum! is a good one, with operating profit for this part of the company increasing 18%. China continues to be a strong territory for the KFC, Taco Bell, and Pizza Hut brands -- as many have pointed out, Yum! is a great way to gain exposure to this market. And how about this -- management saw fit to buy back shares of the company to the tune of almost a billion bucks! That says something to shareholders, as does the increased guidance. Granted, Yum! upped the per-share expectation by only a couple of pennies to $1.87 (excluding items), but that's still the right direction, isn't it? Also, according to Briefing.com, the company beat Wall Street's expectations by two cents.

Yum!, which competes with McDonald's (NYSE: MCD), Burger King (NYSE: BKC), Wendy's (NYSE: WEN), and all manner of neighborhood eateries, needs to continue the good fight on the home front. It reversed a negative same-store sales trend this past quarter, but management must not rest on this nice stat -- Yum! must explore better marketing campaigns and branding tactics to keep the comps headed higher. Yum!'s stock is not far from a 52-week high, but I'm currently bullish on its prospects.

Disclosure: I own none of the companies mentioned here; positions can change at any time.

Nelson Peltz isn't too happy with Wendy's (NYSE: WEN), which quickly rejected two of his bids for the company, including a plan to combine Wendy's with Arby's, a fast-food chain owned by Triarc (NYSE: TRY), a company chaired by Mr. Peltz.

Normally I'm pretty sympathetic to the campaigns of activist investors, but Peltz has a pretty poor record on corporate governance. During his proxy fight with Heinz back in 2006, the company responded to his calls for change with this: "Triarc received a corporate governance rating of 21.5, exceeding only 21.5% of all companies in the S&P SmallCap 600 and ranking it in the bottom quartile. Separately, Corporate Library gave Triarc an 'F' on overall board effectiveness -- the lowest possible rating."

So it appears that Peltz may not be walking corporate governance talk. But then again, Wendy's has also been a prodigious destroyer of shareholder value of late, so this is kind of like trying to decide between leaving the kids with Britney or K-Fed.