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Better Buy: McDonald's vs Yum!

McDonald's (NYSE: MCD  ) has been a dud in 2012, while Yum! Brands (NYSE: YUM  ) has continued to outperform, but with that run has come a premium multiple. 

So which stock is a better buy today: the cheaper, underperforming McDonald's or the rosier and more expensive Yum! Brands?

Mickey D's has a more sustainable long-term model than just about any company in this space, and has a low price-to-earnings ratio right now. In a world of short-termism, it's easy to forget that the best investment is measured in years, not quarters, and when you take a look at McDonald's long-term trend, investors are getting a bargain, making McDonald's the better buy today.

One of the reasons is McDonald's superior dividend, which at 3.7% is higher than the broad market. As good as it is, there may be better income plays out there. You can uncover "The 3 Dow Stocks Dividend Investors Need" today in this new report. It's absolutely free, so just click here and get your copy today.

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  • Report this Comment On November 30, 2012, at 9:35 AM, craigt111 wrote:

    YUM stock is now down (pre-open on 12-30) by $6.72 after announcing -4 corrected growth for China, for next year! What say all of you now? However, David C. Novak, CEO, announced "in advance of its Annual Investor Meeting, reconfirms its full-year 2012 EPS growth forecast of at least 13%, or $3.24 per share, excluding Special Items. Yum! also announces it expects to once again deliver at least 10% EPS growth in 2013, excluding Special Items, which would mark twelve consecutive years of meeting or exceeding this annual EPS growth target. " Is this a hold or a sell?

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