Johnson & Johnson (JNJ): These Stocks Belong in Your IRA

I’m loving it, and you should too

McDonald’s Corporation (NYSE:MCD) is a fast-food franchise that operates across the globe.

Source: Yahoo Finance

McDonald’s Corporation (NYSE:MCD) is the world’s leading fast-food brand. While the world slowly looks to curb obesity, McDonald’s brand power will help it resist large-scale changes in the market. Customer loyalty combined with a keen management team has enabled McDonald’s to grow and reward shareholders consistently while the market around it changes.

McDonald’s Corporation (NYSE:MCD) has been a “Big Mac” of dividend growth over the last decade. It has grown its dividend annually for 36 years. Would you like some growth with that? Earnings per share have multiplied by 4.5 times, cash flow by 3.3 times, and dividends paid by a little over 7 times (!) in the last 10 years. S&P estimates that McDonald’s will compound earnings at 9% over the near term.

Is this fast-food giant healthy? It has more assets than liabilities with a debt/equity ratio of 0.8. The dividends consume only 48% of its cash flow per share. The upper management of McDonald’s Corporation (NYSE:MCD) has proven very effective with a net profit margin of 19.78%. I believe strong management is essential for McDonald’s moving forward as it looks to the Chinese and Indian markets for growth. McDonald’s has had success tailoring its menus to the diverse markets it operates in.

Bottom line

These companies are all strong candidates for any type of investment account. Given each company’s dividend growth commitment, strong market positions, and financial health moving forward – these companies will provide tremendous long-term returns.

The article These Stocks Belong in Your IRA originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.