5 Stocks That Just Won't Quit

In my weekly Fool column "Get Ready for the Fall," I run Nasdaq.com's 52-week highs list through the "wisdom of crowds" meter we call Motley Fool CAPS. The result: a list of stocks that have flown so high, investors are starting to get nervous about that whole "gravity" thing. But while many stocks will indeed plunge back to Earth, some seem immune to gravity, steadily riding a rising megatrend to ever-greater heights.

Today, we'll move beyond stocks that have hit 52-week highs, and identify companies now surpassing five solid years of outperformance. Which of these will thrash the market averages for another half-decade? Here are this week's leading contenders:

Companies are selected from the "New 5-Year Highs" list published on MSN Money on Friday. CAPS ratings from Motley Fool CAPS.

Safe stocks ... and maybe even better than safe
Is the recession over? Warren Buffett says it is, and with the Dow now pushing 11,000, and the S&P posting sizeable gains of its own these past four weeks, investors seem to be coming around to Buffett's way of thinking. Bullish sentiment is back, and the five stocks named above are all hitting five-year highs. The real question is whether they'll stay there.

Judging from the CAPS ratings being handed out up above, investors do appear to see these stocks as "safe." But it gets even better. Surveying the field, CAPS members believe one of these stocks won't just hold onto its gains -- but go on to earn more of the same.

McDonald's
CAPS member LuckyRice is loving McDonald's: "It always grows and consistently pays a fine dividend. ... It's a low risk stock as people always need food and McDonald's are the leader in cheap food at reasonable margins. I've never seen a McDonald's close in my life ... They are still building new stores all around the world and consistently improving same store sales year over year no matter what the competition does."

CAPS All-Star mpotisk agrees that: "Unbeatable franchise value plus fast expansion in China and other emerging markets should deliver some nice long term gains."

Which "other markets," you ask? irvingfisher answers: "A hamburger joint that can make money in India. Now that's something."

Golden arches, leaden profits
And I agree, McDonald's is something. An American icon. A global brand. A steady grower and a generous dividend payer. But here's the bad news: The one thing McDonald's is not, is ... a bargain.

Selling for 16.4 times earnings, and with high capital spending requirements that push the company's price-to-free cash flow ratio up past 19, McDonald's simply isn't priced to deliver stock profit from this point forward. Not at the annual 10% growth rate that analysts project for it over the next five years. Not even with the 3.3% dividend that McDonald's promises to pay its shareholders over the coming year.

The company carries a boatload of debt, too. Now, I agree with what some CAPS members have said about the company being a better bargain than less indebted restaurateurs like Yum! Brands (NYSE: YUM), for example. Yum has even weaker free cash flow than its rival, and carries a significantly higher multiple thereon. But in a market as big as the one open to us, there are better values than either of these.

Take Starbucks (Nasdaq: SBUX), for example. Here you have a company:

• Carrying net cash
• A faster growth rate (16% versus Mickey D's 10%)
• A superior price-to-free cash flow ratio (16.8)
• And a global brand that is, I'd argue, every bit as strong as what McDonald's boasts

Heck, as of this month, Starbucks even pays a dividend. Not as generous as the one McDonald's has on tap, I'll grant you, but when combined with the company's faster rate of growth and more attractive valuation, I'd say Starbucks should beat "McCafe" in any investing taste test -- hands down.

Time to chime in
Of course, that's just my opinion. As reflected in its four-star CAPS rating, there are plenty of Fools out there who disagree with me -- and if you're one of 'em, don't be shy: Tell us why.

On Motley Fool CAPS.