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McDonald's NYSE:MCDBy Richard Band
Profitable Investing

McDonald’s (NYSE:MCD) just reported an unexpected bump in November same-store sales after weakness earlier in the year. That’s good news, of course, but it isn’t the reason this fast-food giant is the stock I’d hold forever.

Instead, I simply love the consistency of this outfit. Mickey D’s has raised its dividend every year since 1976 — through three wars, four Fed chairmen and five recessions. The most recent hike, payable Dec. 17, amounts to a robust, inflation-beating 10%.

Newly anointed CEO Don Thompson has pledged to return all the company’s free cash flow (after capital spending) to shareholders in the form of dividends and stock buybacks. Can you imagine a more powerful statement aligning your interests with those of management? Apple and Google (NASDAQ:GOOG) — please follow suit!

Plus, McDonald’s is a solid franchise that has proven over and over again its ability to weather tough times. Even during the near-depression of 2008, the restaurant came out with new menu items (and permutations of old ones) that brought customers streaming back in. It will happen again. I’m projecting a total return (dividends plus price gain) of 15%–20% on MCD in the next year, while your investment should double within the next six years.

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