Hot Blue Chip Stocks To Watch For 2014

Hot Blue Chip Stocks To Watch For 2014: McDonald's Corporation(MCD)

McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.

Advisors' Opinion:

• [By Steven Russolillo]

  Gap Inc.(GPS), McDonald's Corp.(MCD) and General Motors Co.(GM) were among other companies that cited the weather as a factor in their results and projections. Companies in the energy, consumer-discretionary and industrial sectors mentioned the weather the most on their calls, FactSet data show.

• [By Dividends4Life]

  Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description: 1. Avg. High Yield Price 2. 20-Year DCF Price 3. Avg. P/E Price 4. Graham Number CINF is trading at a discount to only 3.) above. The stock is trading at a 36.8% premium to its calculated fair value of $34.96. CINF did not earn any Stars in this section. Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description: 1. Free Cash Flow Payout 2. Debt To Total Capital 3. Key Metrics 4. Dividend Growth Rate 5. Years of Div. Growth 6. Rolling 4-yr Div. > 15% CINF earned two Stars in this section for 1.) and 2.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The stock earned a Star as a r! esult of its most recent Debt to Total Capital being less than 45%. The company has paid a cash dividend to shareholders every year since 1954 and has increased its dividend payments for 54 consecutive years. Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description: 1. NPV MMA Diff. 2. Years to > MMA The NPV MMA Diff. of the $62 is below the $500 target I look for in a stock that has increased dividends as long as CINF has. If CINF grows its dividend at 1.2% per year, it will take 5 years to equal a MMA yielding an estimated 20-year average rate of 3.68%. Memberships and Peers: CINF is a member of the S&P 500, a Dividend Aristocrat, a member of the Broad Dividend Achievers™ Index and a Divid

• [By Jim Jubak]

  Energy stocks, well, I don't see oil moving up a whole lot. It doesn't look like it is going to be necessarily a bad time for energy stocks because oil is going to be dropping, but I don't see a whole lot of energy in the sector. But the real problem, I think, is consumer stocks. These are kind of like the safe stocks that people go to when they want to be in the market but they're a little worried about the market. You know the stocks I mean, McDonald's (MCD), Coca-Cola (KO), Pepsi (PEP), the companies that have theoretically steadily growing earnings. The problem is we've had a lot of bad news from those stocks in the fourth quarter and in, sort of, month-to-month figures from companies like McDonald's for January and February that we're not seeing much in the way of growth. Two problems there, one of which is sort of general, which is that we're not seeing a whole lot of increases in growth, sort of acceleration in the growth rate in emerging! mark et! s. In fact, we have seen a deceleration, and that has had an effect on companies like McDonald's. The other is that we're battling some individual, or sector trends, so that McDonald's, for example, is fighting against a lot more competition, in the sense that, for some percentage of the market, they are really not very exciting anymore as destination restaurants. For Coke and Pepsi, we're dealing with the fact that cola drinks and sweetened fizzy drinks, in general, are sort of losing market share, again, losing some pizzazz. If you look at all of these sectors and say, "Okay, so what's going to drive the market higher from here," a lot of the sectors that were doing the job in January, and the first half of February, seem to have run out of gas, and that may leave us with very little, other than technology, and it's hard to see technology being sufficient in and of itself to drive the market from here and that is what I 'd look for in the week ahead, what's our leaders

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