MCD - McDonald's Corporation

NYSE - NYSE Delayed Price. Currency in USD
+1.40 (+0.76%)
At close: 4:00PM EDT

186.14 -0.23 (-0.12%)
After hours: 7:12PM EDT

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Previous Close184.97
Bid186.14 x 1100
Ask186.30 x 1000
Day's Range184.43 - 186.63
52 Week Range153.13 - 190.88
Avg. Volume3,779,441
Market Cap142.632B
Beta (3Y Monthly)0.39
PE Ratio (TTM)24.72
EPS (TTM)7.54
Earnings DateApr 29, 2019 - May 3, 2019
Forward Dividend & Yield4.64 (2.53%)
Ex-Dividend Date2019-02-28
1y Target Est197.69
Trade prices are not sourced from all markets
  • McDonald's (MCD) Gains But Lags Market: What You Should Know
    Zacks5 hours ago

    McDonald's (MCD) Gains But Lags Market: What You Should Know

    McDonald's (MCD) closed the most recent trading day at $186.37, moving +0.76% from the previous trading session.

  • Domino’s Pizza Stock Looks Too Cheap
    InvestorPlace10 hours ago

    Domino’s Pizza Stock Looks Too Cheap

    Stocks like Domino's Pizza (NYSE:DPZ) don't go on sale very often. But to some investors, "on sale" might be an exaggeration.Source: Shutterstock Domino's Pizza stock, even after its recent selloff, is hardly cheap. Indeed, DPZ stock still trades at over 22 tines analysts' consensus earnings per share estimate. * 10 Stocks on the Rise Heading Into the Second Quarter That's a huge multiple for a relatively mature company. And given that DPZ stock has tanked lately in part due to its big Q4 earnings miss last month, it's a multiple that might not seem all that attractive.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut DPZ has plenty of room to grow into that multiple. Between the company's same-store-sales growth and the new stores it will open, its revenue should continue to increase nicely for years to come. Given its franchise model and the leverage on its balance sheet, its higher revenues will have an amplified effect on its earnings.DPZ is still facing risks. But those risks seem manageable, as Domino's is well-positioned to handle any challenges ahead. DPZ stock isn't cheap, but stocks like this shouldn't be, and they very rarely are. The Case for DPZ StockDPZ simply has come to dominate the pizza business. Yum! Brands' (NYSE:YUM) Pizza Hut's growth has stalled out in recent years. Papa John's (NASDAQ:PZZA) sales are collapsing. Yet Domino's keeps growing at impressive rates.Indeed, during the company's "disappointing" Q4, its U.S. same-store sales rose 5.6% year-over-year. Meanwhile, Pizza Hut's comparable-store sales were unchanged. Papa John's comps fell 8%. McDonald's (NYSE:MCD) same-store sales rose 2.3% in Q4, and most investors thought its results were good.No major chain's same-store sales are increasing as rapidly as those of DPZ. No major chain, in fact, is coming close. That trend should continue, and Domino's can benefit from opening new stores, as well.It's adding stores to U.S. metro areas. That's been a successful strategy despite fears that new stores might "cannibalize" existing stores. The company's overseas business continues to grow, in terms of both comparable stores and new opportunities.DPZ still expects its annual retail sales to rise 8%-12% over the next few years, with its global comparable sales increasing 3%-6% and its net store count rising 6%-8% annually. On the other hand, 8%-12% growth might not sound like much, since DPZ stock has a trailing-twelve month P/E ratio of 29.But because of DPZ's franchise model, 8%-12% revenue growth results in earnings and cash-flow growth that's much higher than that. Store-level costs are borne by franchisees, enabling DPZ's operating margins to rise faster than its revenue. And the leverage on Domino's balance sheet further boosts its net margins. For 2020, for instance, analysts' consensus estimate calls for a 9.8% increase in sales and an 18% increase in EPS. The Risks and Rewards of DPZ StockThe company's 8%-12% revenue-growth guidance, then, suggests that its earnings easily could increase 100% or more over the next four or five years. Even assuming that the P/E ratio of DPZ stock drops in several years as DPZ matures, investors will still have an easy path to double-digit annual returns, including dividends. Any outperformance - or a continued willingness by investors to pay up for DPZ stock - sets up a path for DPZ to reach $500 and beyond.But there are risks facing DPZ stock. The most obvious one is the potential for recession in the U.S. or in key international markets. Domino's struggled during the financial crisis: its same-store sales declined 4.9% in 2008. But it clearly has a better business ten years later, and its emphasis on low price points could mitigate the macro pressures on it, particularly domestically.There are two smaller concerns. The first is that on the whole there's much more competition in the pizza industry than ever before. The rise of online ordering services like GrubHub (NYSE:GRUB) and DoorDash has allowed thousands of restaurants to offer delivery services, breaking pizza's traditional dominance of that space. In turn, other chains now offer delivery, including casual dining giants like Brinker International (NYSE:EAT) and Dine Brands Global (NYSE:DIN).But as that trend has accelerated lately, Domino's sales don't appear to have suffered. The company's comp-sales growth has decelerated from 12% in 2015 to 6% in 2018. That's not necessarily a surprise, however, given the tougher competition. But 6% still is more than enough growth to leverage expense growth and expand margins. And it hardly suggests that the company's business model is facing an existential threat. The Best FranchiserThe final risk is one facing the entire industry. Companies like McDonald's and Burger King owner Restaurant Brands International (NYSE:QSR) have benefited from franchising more restaurants. That's benefited MCD stock, in particular, as rising labor and food costs become the problem of the franchisees , not that of the corporate parent.But as James Brumley pointed out last year, at some point franchisees won't be able to handle that pressure any more. Carrols Restaurant Group (NASDAQ:TAST), the largest Burger King franchisee, shows the problem. Over the past three years, QSR stock is up 63%, but TAST has declined by almost 25% during the same period.Domino's franchisees, however, are doing quite well. The company pointed out in a recent investor presentation that its franchisees' average EBITDA per store has soared in the past decade, rising from $49 million in 2008 to over $137 million in 2018. Franchise-level profits have stopped increasing lately, but they're still positive, and franchisees' margins still look quite healthy.So, purely from a business standpoint, Domino's looks like far and away the best pick among restaurant stocks. It has more opportunities to open additional stores than its large peers. DPZ can still take plenty of market share from its corporate rivals (and independent pizzerias). Its franchisees are happy. Since Domino's is doing an awful lot right at the moment, the owners of Domino's stock have little to complain about.Given DPZ's growth potential, DPZ stock is worth paying up for. With Domino's Pizza stock now 15% cheaper than it was just a few weeks ago, the shares may be expensive, but they're still attractive.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Specialty Retail ETFs to Buy the Industry's Disruption * 5 Stocks To Buy for the Happiest Employees * 3 Out-of-Favor Consumer Stocks to Buy Compare Brokers The post Domino's Pizza Stock Looks Too Cheap appeared first on InvestorPlace.

  • CNBC11 hours ago

    Restaurant Brands CEO: Burger King's $5 coffee subscription will help it win the breakfast wars

    For Burger King, its new $5 monthly coffee subscription is a way to get customers into their stores in the morning to check out their other breakfast offerings, Restaurant Brands CEO Jose Cil said.

  • Coca-Cola Stock Still Is Too Expensive
    InvestorPlace12 hours ago

    Coca-Cola Stock Still Is Too Expensive

    I'll be honest: I simply don't understand the bull case for Coca-Cola (NYSE:KO). The KO stock price has held up reasonably well in recent years, admittedly. But Coca-Cola stock isn't cheap. There are obvious risks to demand going forward. Add on disappointing growth, and the numbers here don't seem to add up.Source: Coca-ColaI concede that I've long been a skeptic toward KO stock. I called it "expensive" 20 months ago at roughly the same price, and it's at least held up. On this site, Luke Lango made a "buy the dip" case last month; a few days later, Josh Enomoto highlighted the company's opportunity in China.With all due respect, I disagree. The issue from here is that many investors are valuing Coca-Cola for what it was: a wonderful business that produced steady growth and lockstep increases in its dividend. Coca-Cola stock famously has made billions of dollars for Warren Buffett and Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B). It's also been a great long-term investment for the rest of us.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks on the Rise Heading Into the Second Quarter But times change. And those changes have notably shifted the investment case here. The KO Stock Price Tumbles After EarningsAt this point, it seems increasingly difficult to make the fundamental case for Coca-Cola stock. A multi-year transformation -- including a "refranchising" of its bottling operations -- has hit revenue in recent years, but it was supposed to create a leaner, more profitable company.That's a key reason why the KO stock price fell over 8% after disappointing earnings last month -- a huge move for a typically low-volatility stock. Guidance for 2019 was much weaker than expected. Coca-Cola expects earnings growth of -1% to 1% against 2018's $2.08.Investors were hoping for much more after the refranchising. The problem goes beyond results for a single year, however, as 2019 guidance implies EPS of $2.06 to $2.10. In 2013, Coca-Cola's non-GAAP EPS was $2.08. Over six years, including a massive transformation, earnings per share will barely move, if at all.But even that doesn't tell the full story.Coca-Cola stock, like so many other U.S.-based investments, has benefited from a lower tax rate. The underlying (i.e., adjusted) tax rate in 2013 was 23%. It's estimated to be 19.5% in 2019. That lower rate provides a 4.5% benefit to net earnings. Billions of dollars in share buybacks boost EPS as well. Considering this, Coca-Cola has 4.5% fewer shares outstanding than it did in 2013. In other words, KO is making less pre-tax profit than it did six years ago (the figure has declined about 8.7% by my math).And yet, Coca-Cola stock trades for 22x the midpoint of 2019 EPS guidance. That multiple seems incompatible with the performance over the past few years. The Risks to KO StockTo be fair, a stronger dollar has been an issue, hitting revenues and profits overseas. Coca-Cola is projecting a significant currency headwind, with 6% to 7% impact on operating income in 2019 alone. This comes after a 4% hit in 2018. Essentially, much of the potential benefit of the refranchising has been swallowed by currency effects.That said, it's not as if the dollar is guaranteed to get weaker going forward. KO stock still looks reasonably expensive against even currency-neutral growth. Meanwhile, risks are rising.Soda consumption continues to decline in the U.S., dropping by 20%-plus over two decades according to one report. Coca-Cola has tried to diversify, acquiring Costa Coffee and sparkling water manufacturer Topo Chico last year. But a $5 billion coffee deal -- let alone a $220 million bottled water purchase -- doesn't move the needle much against a $200 billion market cap.The trend here is consistently negative, particularly in terms of diet soda. Sparkling waters from Nestle (OTCMKTS:NSRGY), National Beverage (NASDAQ:FIZZ) (even with some recent trouble), and private companies like Polar and Spindrift are taking share from diet soda. Neither Coke with its Dasani brand, nor Pepsi (NASDAQ:PEP) with its Aquafina, have been able to win much in that market. New BrandsMeanwhile, HSBC Securities highlighted an interesting stumbling block for Coca-Cola's plans for expansion. Coca-Cola has looked to new extensions, including flavored Diet Coke and an orange-vanilla offering for its full-calorie brand. But, as HSBC pointed out, those efforts are likely to upset the same bottlers who have taken over Coke's operations.Smaller products have high startup costs, as well as long payback periods. Coke's refranchising may slow it from following the brand expansion strategy that's currently popular among consumer companies. It's a bit analogous to the risk facing Coke customers McDonald's (NYSE:MCD) and Restaurant Brands International (NYSE:QSR). Those companies have shifted costs to their franchisees too. However, those franchisees may rebel as their parents look to compete solely on price or otherwise push the limits of their profitability. Not Enough GrowthFrom here, zero growth isn't worth the risks facing the industry. As such, KO stock looks far too expensive. I asked last year if Coca-Cola might be the next giant to stumble after consumer heavyweights Anheuser-Busch InBev (NYSE:BUD), Kraft Heinz (NASDAQ:KHC), and Altria (NYSE:MO) saw big declines.It hasn't happened yet, even with the post-Q4 selloff. But I wouldn't be shocked if it did. In fact, I'd be less surprised if KO stock fell sharply than if Coca-Cola somehow figured out how to grow in an industry destined for long-term declines.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Specialty Retail ETFs to Buy the Industry's Disruption * 5 Stocks To Buy for the Happiest Employees * 3 Out-of-Favor Consumer Stocks to Buy Compare Brokers The post Coca-Cola Stock Still Is Too Expensive appeared first on InvestorPlace.

  • Analysts Expect Dunkin’ Brands’ EPS Growth to Fall in 2019
    Market Realist15 hours ago

    Analysts Expect Dunkin’ Brands’ EPS Growth to Fall in 2019

    Is There More Upside to Dunkin’ Brands Stock?(Continued from Prior Part)Analysts’ expectations For 2019, Dunkin’ Brands’ (DNKN) management expects its adjusted EPS to be in the range of $2.94 to $2.99. For the same period, analysts are

  • What Are Analysts Expecting from Dunkin’ Brands’ Revenue in 2019?
    Market Realistyesterday

    What Are Analysts Expecting from Dunkin’ Brands’ Revenue in 2019?

    Is There More Upside to Dunkin’ Brands Stock?(Continued from Prior Part)Analysts’ expectations For 2019, analysts expect Dunkin’ Brands (DNKN) to post revenue of $1.36 billion, which represents a rise of 3.0% from $1.32 billion in 2018. The

  • Analysts Favor ‘Hold’ Rating for Dunkin’ Brands
    Market Realistyesterday

    Analysts Favor ‘Hold’ Rating for Dunkin’ Brands

    Is There More Upside to Dunkin’ Brands Stock?(Continued from Prior Part)Analysts’ recommendationsOf the total 25 analysts that follow Dunkin’ Brands (DNKN), 24.0% have given the stock a “buy” rating, 68.0% are favoring a “hold” rating,

  • Is There More Upside to Dunkin’ Brands Stock?
    Market Realistyesterday

    Is There More Upside to Dunkin’ Brands Stock?

    Is There More Upside to Dunkin’ Brands Stock?Stock performanceAs of March 19, Dunkin’ Brands (DNKN) was trading at $71.55, which represents a rise of 3.9% since the announcement of its fourth-quarter earnings on February 7. The company is

  • Wendy’s Stock Falls after Mizuho Downgrade
    Market Realistyesterday

    Wendy’s Stock Falls after Mizuho Downgrade

    Mizuho Downgrades Wendy’s from 'Buy' to 'Neutral'(Continued from Prior Part)Stock performance The Mizuho downgrade appears to have led a fall in Wendy’s (WEN) stock price. Today, at 10:30 AM EST, the company was trading ~1.2% lower from its

  • Mizuho Downgrades Wendy’s from ‘Buy’ to ‘Neutral’
    Market Realistyesterday

    Mizuho Downgrades Wendy’s from ‘Buy’ to ‘Neutral’

    Mizuho Downgrades Wendy’s from 'Buy' to 'Neutral'Wendy’s downgradeMizuho downgraded Wendy’s (WEN) from “buy” to “neutral” today and also lowered its 12-month price target from $20 to $18. The new price target implies an upside

  • CNBC2 days ago

    Starbucks announces trials for recyclable and compostable cups

    Starbucks said it will start trials for recyclable and compostable cup designs later this year in several markets. The coffee giant has drawn fire in the past from environmental activists for the roughly 6 billion cups it uses every year. Last year, it pledged to phase out plastic straws from all of its stores by 2020.

  • TheStreet.com2 days ago

    McDonald's Could Break Out on the Downside: Don't Spill the Special Sauce

    Some market watchers and technical analysts might call it a triangle formation. The volume pattern is not conclusive but the On-Balance-Volume (OBV) line shows a decline from November. A weakening OBV line tells me that sellers of MCD have been more aggressive.

  • CNBC3 days ago

    How this 'Shark Tank' judge went from scraping gum at McDonald's to starting a venture fund with billionaire Stephen Ross

    Anyone who gets to appear as a guest judge on "Shark Tank" has made it pretty big, from Major League Baseball star-turned-investor Alex Rodriguez to Bethenny Frankel of "Real Housewives of New York City." Even Ring founder Jamie Siminoff , who appeared as a contestant in 2013 (he later sold the company to Amazon for $1 billion) , returned to the show as a judge. Sunday's guest judge, Matt Higgins, is no exception.

  • Will Burger King's $5 Coffee Trick Hurt Starbucks and McDonald's?
    Motley Fool4 days ago

    Will Burger King's $5 Coffee Trick Hurt Starbucks and McDonald's?

    The BK Cafe Coffee subscription could drive business away from rival morning haunts.

  • 3 Best Restaurant Stocks Morgan Stanley Says to Take a Bite Of
    InvestorPlace6 days ago

    3 Best Restaurant Stocks Morgan Stanley Says to Take a Bite Of

    U.S. same-restaurant sales dipped into negative territory in February for the first time in nine months. A potentially softening U.S. restaurant environment suggests investors need to be even more selective when it comes to choosing restaurant stocks. Morgan Stanley analyst John Glass recently said investors should focus their attention on fast food stocks in 2019. * 15 Stocks That May Be Hurt by This Year's Big IPOs Here's a look at his top three favorite restaurant stocks to buy.InvestorPlace - Stock Market News, Stock Advice & Trading Tips McDonalds (MCD)Source: Shutterstock The past decade hasn't all been smooth sailing for McDonald's (NYSE: MCD) or its investors. However, Glass says the Golden Arches are still the gold standard of restaurant stocks: "U.S. sales will outpace peers in '19 and should accelerate as the year progresses as benefits from a comprehensive re-imaging plan become more visible."McDonald's has made an aggressive push toward its Experience of the Future initiative in recent years. This initiative emphasizes mobile ordering, delivery and pickup options, store remodels and in-store kiosks.Glass says heavy investments likely clouded McDonald's numbers in 2018. The market doesn't seem to appreciate how much these under-the-radar improvements could improve business efficiency in coming years.In the near term, focus on value offerings and local advertising in 2019 should support same-store sales numbers. Glass predicts return on invested capital will soon hit new highs as McDonald's reaps the rewards of its investments. In addition, he says earnings will get a boost from declining capital expenditures starting in 2020.Finally, in an increasingly unpredictable market environment, MCD stock offers investors value, stability and an attractive 2.5% dividend yield. Morgan Stanley has an "overweight" rating and $210 price target for MCD stock. Restaurant Brands International (QSR)Source: Shutterstock Restaurant Brands International (NYSE: QSR) is the parent company of Burger King, Popeyes and Tim Hortons. Glass says there is a huge disconnect between QSR stock valuation and the company's impressive growth numbers. Fundamentals at Tim Horton's seem to be improving, including same-restaurant sales growth of 2.4% in the most recent quarter. Burger King's SRS growth dropped from 10.1% in 2017 to just 8.9% in 2018, but it still outpaced most of its peer group. Popeyes stole the show for QSR stock investors last year. SRS growth jumped from 5.1% in 2017 to 8.9% in 2018.Glass said that after a big year in 2018, investors can expect more big numbers for this restaurant stock in 2019."Catalysts include improving margins at Tim's, better visibility on international expansion and economics, and increased investor outreach to help broaden the shareholder base."From a valuation perspective, QSR stock is trading at a free cash flow yield of roughly 7% based on Morgan Stanley's 2020 cash flow estimates. Glass points out that makes QSR a rare value among restaurant stocks. * 15 Stocks Sitting on Huge Piles of Cash Morgan Stanley has an "outperform" rating and $70 price target for QSR stock. Chipotle Mexican Grill (CMG)Source: Shutterstock Chipotle Mexican Grill (NYSE: CMG) has been a battleground stock for several years now. The company's growth story was derailed back in 2015 following a series of food safety scares. However, CMG stock has nearly doubled in the past year on optimism that new CEO Brian Niccol can replicate his past success as head of Taco Bell. Glass says Chipotle is a perfect early-stage turnaround opportunity for investors. Niccol and the management team are pushing hard on several initiatives, focusing on throughput, advertising, menu improvements, digital ordering and customer loyalty. Early returns on the initiatives have been positive, but 2019 will certainly be a show-me year for Chipotle.Because Chipotle's restaurants are company owned and not franchised, the company may face unique margin pressures compared to its franchised peers. Rising wages will certainly take a bite out of Chipotle's bottom line. However, Glass said investors should be watching traffic as a key indicator that Chipotle's outlook is improving. In the fourth quarter, Chipotle reported 6.1%t SRS growth, double-digit revenue growth and a 2% increase in total transactions.As long as the recovery keeps trending in the right direction, Glass said long-term margins could eventually improve from around 18.7% to 21%. Morgan Stanley has an "overweight" rating and $617 price target for this restaurant stock.As of this writing, Wayne Duggan did not hold a position in any of the aforementioned securities.Compare Brokers The post 3 Best Restaurant Stocks Morgan Stanley Says to Take a Bite Of appeared first on InvestorPlace.

  • ETFs & Stocks for a Green Portfolio on St. Patrick's Day
    Zacks7 days ago

    ETFs & Stocks for a Green Portfolio on St. Patrick's Day

    St. Patrick's Day is around the corner and investors across the world are keen on trying their Irish luck for green returns in their stock portfolio.

  • Forget BJ's Restaurants, Buy These 3 Restaurant Stocks Instead
    Zacks7 days ago

    Forget BJ's Restaurants, Buy These 3 Restaurant Stocks Instead

    Demand for restaurant services depends on consumer spending. In a fiercely competitive industry, these three restaurant stocks stand to gain.

  • McDonald's (MCD) Gains As Market Dips: What You Should Know
    Zacks7 days ago

    McDonald's (MCD) Gains As Market Dips: What You Should Know

    In the latest trading session, McDonald's (MCD) closed at $182.74, marking a +0.37% move from the previous day.

  • InvestorPlace7 days ago

    Why Elite, Dividend-Paying Businesses Are the Ultimate “Wealth Defense”

    If you're like a lot of folks, you're worried about inflation… and the danger it presents for people saving for retirement, or already in retirement.You might also be worried about another financial crisis wrecking your investments.If you're one of these people (and there's a good chance you are), the "no brainer" decision for you is to own elite, dividend-paying businesses.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOwning an elite dividend-payer is a good inflation defense because its strong brand and loyal customer base will allow it to raise prices along with inflation. Its dividend will often increase at a faster rate of inflation, so the value of your income stream remains intact.These companies are safer, better places to park long-term wealth than any currency or any government bond. They are better for parking long-term wealth than gold.There are several major reasons why they're an incredible vehicle for your money…* For one, buying a great business is extremely cheap and easy. You don't get hit with big fees and commissions when you buy and sell them. You can't say that about real estate or art. Buying a great business through an online broker will cost you less than lunch at most restaurants.* Holding a great business is extremely cheap and easy. It's as easy as holding cash in the bank. There are no storage costs. There are no transportation costs. You don't have to get a safe-deposit box or a home safe, like you might do with gold or diamonds.* Shares of great businesses are liquid and freely traded. There's a huge market for these business. It's open most every business day.* Elite, dividend-paying businesses also pay out reliable, extremely safe income to their shareholders.* And finally, great businesses are great inflation-defense vehicles. They have long histories of rising in value when paper currencies decline in value.This is one of the most important aspects of these stocks…You see, governments have a long history of debasing currencies.When they want to pay for big social programs or wars, governments often print up extra currency units (like U.S. dollars). Every currency unit that is printed devalues the existing currency units. This is called "inflating" the money supply.Inflation is a way for governments to quietly clip small bits of value from your bank account and your wallet.Inflation is one of the greatest dangers a person saving for retirement faces. It can crush the future buying power of the money you save today.This is why owning great businesses is so important. Great businesses hold their value through inflationary periods.The world's most successful investor, Warren Buffett, figured this out a long time ago.Buffett urges people who are worried about paper-currency declines to own world-class businesses. He figured out a long time ago that owning great businesses is a better inflation defense than owning gold.I agree with Buffett on this point. The numbers prove it. Owning great businesses is better than gold when it comes to preserving and growing wealth over the long term.Consider that from the start of 1995 through early 2019 -- a time period that includes booms and busts for both stocks and gold - gold returned 241%.Now consider during that time…ExxonMobil (NYSE:XOM) returned 755%.Wal-Mart (NYSE:WMT) returned 1,007%.Johnson & Johnson (NYSE:JNJ) returned 1,257%.McDonald's (NYSE:MCD) returned 1,963%.(Note: These numbers factor in dividend reinvestment. Gold, of course, doesn't pay dividends at all.)Keep in mind… the companies I just mentioned were well-established enterprises in 1995. It wasn't like you were buying speculative startups.The numbers are clear. Owning elite businesses that generate consistent dividends is a better long-term strategy than owning gold.If you're concerned about inflation or another financial crisis, I encourage you to think about this idea… and how the world's greatest investor, Warren Buffett, approaches it.Sure… own some gold. Own some real estate. But keep in mind the proven wealth-building power of owning the world's best businesses.If you achieve great results with other strategies, congratulations. But if you're one of the many investors who has found lots of "action" -- but little success -- with exciting strategies, I hope you'll come around to the idea I've laid out for you today.Once you come around, and commit to a lifetime of accumulating elite, dividend-paying businesses purchased at reasonable prices, you'll eventually have a beautiful view of your "investment backyard"…At the end of your investment career, you'll have a large collection of elite, dividend-paying businesses… throwing off regular cash dividends.You'll have an orchard of money trees in your backyard.The branches of your money trees will be heavy with fruit every year. One "tree" will yield 20% on your original investment… one will yield 25% on your original investment… one will yield 30% on your original investment… and so on.Broad market corrections won't concern you. The latest government drama won't concern you.You'll sleep well at night knowing your elite businesses will continue to pay out regular cash dividends.You'll have a large and growing portfolio of the world's best soda companies, the world's best energy companies, the world's best food companies, etc.Instead of a fancy art collection or a car collection, you'll have a money tree collection.If you commit to a lifetime of accumulating elite, dividend-paying businesses purchased at reasonable prices, you're virtually guaranteed to build significant wealth in the stock market. And you will build that wealth safely.This is the world's 1 way to invest for retirement.It's the closest thing there is to having money trees growing in your back yard. Regards,BrianCompare Brokers The post Why Elite, Dividend-Paying Businesses Are the Ultimate a€œWealth Defensea€ appeared first on InvestorPlace.

  • Elite Dividend Payers: The Cure for the Biggest Mistake Income Investors Make
    InvestorPlace7 days ago

    Elite Dividend Payers: The Cure for the Biggest Mistake Income Investors Make

    Amateur investors often bring up a common objection to buying elite dividend-paying businesses. Acting on this objection often leads them into very risky investments.Most elite dividend payers sport annual dividend yields in the neighborhood of 2%-5%. And these yields are incredibly safe and reliable. They rise every year.In addition to elite dividend payers, the stock market contains groups of businesses that pay annual yields of 6%… 8%… 10%… even 12%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe amateur looks at these numbers at says, "Why buy a business that yields 4% when I can buy one that yields 8%?" And then, the amateur makes one of the biggest investment mistakes in the world.They "chase" yield.There's a classic piece of investment wisdom about chasing yield. It goes: "More money has been lost chasing yield than at the barrel of a gun." Chasing yield is the act of buying stocks simply because they offer high yields… while ignoring vital business factors.Some businesses engage in risky business ventures or take on lots of debt in order to pay high yields. Finance and real estate companies often do this.Some businesses own oil & gas wells and pay dividends from the production. Those dividend payouts are often totally dependent on oil & gas prices staying elevated. They can be incredibly volatile.These businesses are usually very dangerous for the average investor.For example, there is a group of companies whose chief business activity is borrowing money at low interest rates… and then using that borrowed money to buy mortgages that pay higher interest rates. They make money from the "spread" between the two.One of the largest and most popular of these companies is Annaly Capital Management (NYSE:NLY).Annaly is probably operated by good people. But because it borrows lots of money to buy mortgages, its business -- and its dividend yield -- is very volatile. Small changes in the business (like how much it has to pay to borrow money) can cause enormous changes in shareholder returns.Below is a chart of Annaly's dividend payments from early 1998 to early 2019. As you can see, these payments are incredibly volatile.The volatile nature of Annaly's dividend payment leads to volatile share price movement. Below is a chart of Annaly's share price during the same time period (early 1998 to early 2019).The volatility in the early 2000's and around the 2008 financial crisis is par for the course, given what was going on in the market.But even after the recovery in 2009 -- note the drop from $19 per share to $10 per share.Or… consider the performance of the San Juan Basin Royalty Trust (NYSE:SJT). Prior to 2014, this trust was one of the biggest most popular trusts that owned natural gas assets.Then, the price of natural gas dropped around 65%. Because the San Juan Basin Royalty Trust derived its revenue from natural gas, its shares dropped as well. As you can see from the chart below, they fell from $20 to around $4 per share.Also consider the performance of Enerplus Resources (NYSE:ERF). Years ago, it was one of the biggest and most popular firms that owned oil & gas wells… and paid dividends out of production.Starting in 2014, crude oil fell from over $100 per barrel to less than $30 per barrel. This decline helped crush Enerplus shares. As you can see, they fell from $25 per share to barely $2 per share.The examples of Annaly, San Juan Basin, and Enerplus are not unique. And I'm not picking on these particular businesses.This story plays out over and over in the stock market… with dozens and dozens of companies.Unsuspecting investors see a company offering a very high yield and they buy it. They don't do any research to determine if the business model is risky or not. In almost every case, it is.Some investors are good at timing their purchases of these volatile businesses. They buy them when they are deeply out of favor with most investors.However, the average investor almost always buys these businesses at the wrong time: near share price peaks. He picks up 8% in dividends and then losses 30% on the share price drop.The individual investor is much, much better off owning stable businesses that pay out reliable and growing dividends. You don't trade in and out of elite-dividend payers. There's no frequent buying and selling. There's no worry that the share price will fall 30%. There's no dangerous leverage.You simply buy them and begin building wealth the low-stress way.While the dividends and share price of Annaly were bouncing up and down, elite dividend payers like Coca-Cola (NYSE:KO) and McDonald's (NYSE:MCD) were paying steady and rising dividends.And that's easy to spot…if you have a powerful, yet elegant tool at your disposal -- like my friend Louis Navellier's Dividend Grader.Once you've found a solid dividend, without a ton of price volatility…the rest is history.Regards,BrianP.S. At this point, some might ask: "If you want to avoid volatility…why not just buy gold?" Well, let me show you why.Compare Brokers The post Elite Dividend Payers: The Cure for the Biggest Mistake Income Investors Make appeared first on InvestorPlace.

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