Fast food juggernaut McDonald's Corporation (
) has seen its share price rise almost 31% in 2011. That sort of
outperformance doesn't mean you should continue to chase the stock
higher in 2012, however.
MCD outperformed the rest of the
Dow 30 components
handily this year. Only IBM (
) (+26%) and Pfizer (+24%) can compare with the outstanding price
action we've seen in MCD. What's more, Home Depot (
) (+20% in 2011) is the only other Dow 30 stock that appears in the
Top 5 of the Dow 30 in terms of both 2010 and 2011 performance.
We first recommended McDonald's here at Dividend.com back in
August of 2009, when its shares were around the $56 level. We then
downgraded the stock to "Neutral" this past August.
The stock has continued to run up since then, but dividend
investors should take heed: with a yield now under 2.8% and an
ultra-premium valuation, McDonald's shares will be hard-pressed to
repeat their 2011 performance. We'd love to see MCD pull back to
the $85 to $90 levels before we consider adding any additional
McDonald's stock posted modest gains in premarket trading
McDonald's Corporation (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here
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