Should You Believe GE or McDonald's?

Having suffered losses on three of four days this week, U.S. stocks are mixed this morning. As of 10:05 a.m. EDT, the S&P 500 (SNPINDEX: ^GSPC  ) is up 0.4% and the NASDAQ is up 0.8%. However, the narrower, price-weighted Dow Jones Industrial Average (DJINDICES: ^DJI  ) is being dragged under by its heaviest component, IBM, which has dropped a whopping 6.5% to shave more than 100 points off the index's value.

Follow-up: Dell
Private-equity heavyweight Blackstone is walking away from its preliminary offer for Dell (UNKNOWN: DELL.DL  ) , leaving Carl Icahn as the only alternative to Silver Lake Partners' and Michael Dell's $13.65 per-share buyout offer. This is bad news for Dell shareholders, as it raises the odds that the latter group will "steal" the company from under shareholders' noses.

GE vs. McDonald's on growth
Two Dow bellwethers, General Electric (NYSE: GE  ) and McDonald's (NYSE: MCD  ) , have reported results for the first quarter, producing contrary data points with regard to global growth.

On the one hand, industrial and financial conglomerate GE said its revenue rose to $35 billion, surpassing analysts' expectations of $34.5 billion. The company said European sales were weaker than anticipated (surprise, surprise), but this was partially offset by growth in emerging markets.

Meanwhile, McDonald's first-quarter revenue of $6.6 billion was in line with the consensus forecast. However, global revenue for McDonald's locations open at least 13 months fell 1% in the first quarter, led by a 1.2% drop in the U.S.

According to Thomson Reuters, as of April 12, 59% of the companies in the S&P 500 had reported Q1 2013 revenue that beat the consensus forecast. That's lower than the long-term average of 62% but higher than the average over the past four quarters of 52%. Note that the sample of companies having reported results for the first quarter as of that date -- 29 companies -- is small.

The recent financial crisis dealt GE major a blow, but management took advantage of the market's dip to make strategic bets in energy. If you're a GE investor, you need to understand how these bets could drive this company to become the world's infrastructure leader. At the same time, you need to be aware of the threats to GE's portfolio. To help, we're offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE's multiple businesses. You'll find reasons to buy or sell GE today. To get started, click here now.

With the most recent reading of the Financial Times/Brookings Institution Tiger index now suggesting that global growth is at risk of stalling, investors would do well to focus on valuations and identifying businesses with good secular growth prospects.

Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2373239, ~/Articles/ArticleHandler.aspx, 10/1/2016 3:34:49 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 18 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 5:01 PM
^DJI $18308.15 Up +164.70 +0.91%
^GSPC $2168.27 Up +17.14 +0.80%
S&P 500 INDEX CAPS Rating: No stars
DELL.DL $0.00 Down +0.00 +0.00%
Dell CAPS Rating: *
GE $29.62 Up +0.09 +0.30%
General Electric CAPS Rating: ****
MCD $115.36 Up +0.57 +0.50%
McDonald's CAPS Rating: ***