McDonald’s

The fast-food giant does a ton of business overseas but still remains a solid pick for investors seeking dividends and a degree of safety. McDonald’s Corp. (NYSE: MCD) is the world’s leading global food-service retailer with over 37,000 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 business men and women.

McDonald’s shares have been positive recently as menu price increases and global growth fueled a strong third-quarter earnings report. McDonald’s beat earnings on the top and bottom line, and the company posted its 13th consecutive quarter of positive same-store sales growth.

The analysts noted this in their report:

McDonald’s trades at discount to other highly-franchised peers. Our price target is 16 times 2020 EBITDA, in-line with peers as we recognize durability of cash flows from increased franchise mix. Proprietary work on social media reviews using Merchant Centric data gives us confidence in improving consumer sentiment.

McDonald’s shareholders are paid a nice 2.57% dividend. The $200 Jefferies price target for the stock compares with a consensus price objective last seen at $192.74, as well as the most recent close at $179.16 per share.

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Starbucks

The retail giant has traded down some recently and is offering a very solid entry point. Starbucks Corp. (NASDAQ: SBUX) operates as a roaster, marketer and retailer of specialty coffee worldwide. Its stores offer coffee and tea beverages, packaged roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, juices and bottled water.

The company also licenses its trademarks through licensed stores, as well as grocery and national foodservice accounts. The company offers its products under the Starbucks, Teavana, Tazo, Seattle’s Best Coffee, Evolution Fresh, La Boulange, Ethos, Starbucks VIA, Starbucks Doubleshot, Starbucks Refreshers and Starbucks Discoveries Iced Café Favorites brand names.

The Jefferies team is bullish on the overall opportunities in China and noted this in a recent report:

Our bottoms up analysis of the China business implies it could grow at a 15% compounded annual growth rate to $6.4 billion by fiscal 2024, contributing 20% of EBITDA. While a China spin off is unlikely, our sum-of-the-parts analysis suggests a trading range in the mid-60s to high 80s.

Shareholders of Starbucks are paid a 2.20% dividend. Jefferies has set its price objective at $76, while the posted consensus target is down at $68.48. The stock closed Wednesday’s trading at $64.06 a share.

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These are four very well-known and loved brands that offer investors some safety in a volatile market. While restaurants are very data dependent, and a deep recession could hurt traffic at some, they make good sense for investors in 2019 and beyond.