The fast-food giant continues to revamp both stores and the menu, and it is a solid pick for more conservative accounts. McDonald’s Corp. (NYSE: MCD) is the world’s leading global food-service retailer with over 39,000 locations serving approximately 69 million customers in over 100 countries each day. More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local businesspersons.
The company has built a product pipeline including a new chicken sandwich, a McPlant line and follow-on celebrity promos. BofA Securities feels the key driver of the McDonald’s story will shift to a technology scale that competitors will struggle to replicate. This tech evolution is supporting a wave of consolidation, while it creates pressure on small and mid-tier players.
McDonald’s stock investors receive a 2.44% dividend. BofA Securities has set its price target at $250. The consensus target is $241.53, and shares were last seen trading at $211.39.
This is one of the most recognized and most valuable brands in the world, and the stock is on the Goldman Sachs Conviction List. Nike Inc. (NYSE: NKE) designs, develops, markets and sells athletic footwear, apparel, equipment and accessories worldwide. The company offers Nike brand products in six categories, including running, Nike basketball, the Jordan brand, football, training and sportswear
The company also markets products designed for kids, as well as for other athletic and recreational uses, such as American football, baseball, cricket, golf, lacrosse, skateboarding, tennis, volleyball, walking, wrestling and other outdoor activities. It has apparel with licensed college and professional team and league logos.
Nike also sells a line of performance equipment and accessories comprising bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment and other equipment for sports activities, as well as various plastic products to other manufacturers. Further, it provides athletic and casual footwear, apparel and accessories under the Jumpman trademark; casual sneakers, apparel and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron and Jack Purcell trademarks; and action sports and youth lifestyle apparel and accessories under the Hurley trademark.
When the company posted stellar quarterly results, Goldman Sachs said this:
Nike reported strong fiscal second quarter results, with a solid EPS beat driven by strong digital and international growth, further boosted by cost control and margin delivery despite restructuring expenses. We come away from the quarter with increased confidence in Nike’s DTC and digital transformation, and see significant upside to sales, margins, and returns as the company executes on this channel shift.
Shareholders receive just a 0.78% dividend. Goldman Sachs has raised the price target to $164 from $140. The consensus target is $161.03, and Nike stock closed at $141.60.
These five top companies in the Dow Jones industrial average are decidedly not technology companies, but they do exploit technology to the max to maintain consistent market leadership in their respective sectors and silos. While they maybe not as exciting as electric vehicle makers and artificial intelligence leaders, they make sense for growth investors looking for dividends and perhaps a touch more safety after a volatile and crazy 2020.