There's a lot to love about the Golden Arches: free cash flow growth of 36% amid a global recession, steadily increasing profit and gross margins, and a price to earnings ratio of 16, down from 20 two years ago. McDonald's returns over the last year beat the market by 38 percentage points. But is there still juice left in its stock?
Absolutely, says Catherine Crain, a manager of the Dreyfus Core Equity Fund. "Going forward, growth outside of the U.S. is going to be much faster than it is within," she says. "McDonald's has a long way to go before it's fully penetrated in many of these markets."
--M.K.
