Yum! Brands, Inc. (YUM), McDonald’s Corporation (MCD), Starbucks Corporation (SBUX): Three Restuarants You Must Buy!

Why Yum! Brand is yummy for the portfolio?

With over 39000 stores, Yum! Brands, Inc. (NYSE:YUM) is the largest chain of fast food restaurant in the world. It operates in more than 125 countries- KFC, Pizza Hut, Taco Bell being some of its brand names. Even though the sales growth in China has been slow, out of the $13.6 billion sales last year-China contributed around 51 percent of the sales.

Currently Yum! Brands, Inc. (NYSE:YUM) has a dividend yield of 2%. With a payout ratio of only 40%, it has great potential to increase its dividends- making it a great dividend stock. Analysts have predicted a growth of 11.69% for the next 5 fiscal years. The Chinese market provides excellent opportunity for long-term growth and the company has plans to increase the number of outlets in China. With solid expansion plans and strong growth forecasts, I am definitely bullish on Yum! Brands, Inc. (NYSE:YUM) stock.

McDonald’s- I am loving it!

McDonald’s Corporation (NYSE:MCD) has always been one of my favorite stock. With more than 35000 stores in 120 countries, it is the leader in the fast food industry. It recorded global sales increase of 2.6% as compared to the 1.9% predicted by Wall Street analysts. It is currently trading at a P/E ratio (ttm) of 18.25-well below the industry standard of 21.68. A value investor would be attracted towards McDonald’s Corporation (NYSE:MCD) stock. McDonald’s Corporation (NYSE:MCD) has always rewarded its shareholders. Currently paying a dividend yield of 3.1%-McDonald’s has increased its dividend payout since 1976. With the new menu offerings doing wonders for the company, a solid track record of dividend payouts and with a great potential to expand its business in uncovered regions like China, I am loving this stock.

Foolish Bottom Line-

With the U.S. restaurant industry looking good-all the three stocks mentioned above offer solid growth potentials. I am bullish on all the three stocks. Eat up the solid forecasts of all the three stocks to make your portfolio fat!

The article 3 Restuarants You Must Buy! originally appeared on Fool.com and is written by aastha jhunjhunwala.

aastha jhunjhunwala has no position in any stocks mentioned. The Motley Fool recommends McDonald’s and Starbucks. The Motley Fool owns shares of McDonald’s and Starbucks. aastha is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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