Strong coffee sales spur dividend hike

Article Excerpt

MCDONALD’S CORP. $77 (New York symbol MCD; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.1 billion; Market cap: $84.7 billion; Price-to-sales ratio: 3.5; Dividend yield: 3.2%; WSSF Rating: Above Average) continues to profit from strong demand for its premium coffees and low-cost meals. In the three months ended September 30, 2010, sales rose 4.3%, to $6.3 billion from $6.0 billion a year earlier. Overall same-store sales rose 6.0%, with the Asia-Pacific region up 8.1%, the U.S. up 5.3% and Europe up 4.1%. Earnings rose 10.1%, to $1.4 billion from $1.3 billion. Earnings per share rose 12.2%, to $1.29 from $1.15, on fewer shares outstanding. Thanks to its strong outlook, McDonald’s has raised its quarterly dividend by 10.9%, to $0.61 a share from $0.55. The new annual rate of $2.44 yields 3.2%. McDonald’s is a buy. buy…