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Aggressiveness of McDonald’s makes for an attractive buy

Sun., April 22, 2012

McDonald’s continues to be one of the best defensive dividend-paying stocks you can buy today. (Associated Press)
McDonald’s continues to be one of the best defensive dividend-paying stocks you can buy today. (Associated Press)

The Dow’s top performer in 2011, McDonald’s (NYSE: MCD) recently posted disappointing February sales and has a new CEO on the way. Don’t worry too much, though, about the company’s growth prospects.

Incoming CEO Don Thompson has spent 22 years with McDonald’s, recently overseeing more than 14,000 U.S. stores and the rollout of the profitable McCafe beverage line.

Between 2002 and 2011, McDonald’s increased average annual sales by 6.4 percent and more than doubled its operating profit margins. The company boasts a five-year average operating margin of 27.4 percent, trouncing that of its closest competitor. McDonald’s has paid uninterrupted dividends since 1976, with an impressive recent yield of 2.9 percent and a remarkable average annual dividend growth rate of 20 percent over the past five years.

An oft-overlooked aspect of Mickey D’s is its value as a real estate play, as it owns thousands of prime commercial properties throughout the world.

This top dog in fast food continues to be one of the best defensive dividend-paying stocks you can buy today. (“The Motley Fool Income Investor” newsletter has recommended McDonald’s.)

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