Boston Beer Co Inc (SAM), Johnson & Johnson (JNJ), McDonald’s Corporation (MCD): Should You Be Worried That Corporate Earnings Are Slowing Down?

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Fast-food giant McDonald’s Corporation (NYSE:MCD) is another blue chip with good future earnings prospects.

The company has done an about-face on its menu offerings and advertising campaign. Late last year McDonald’s Corporation (NYSE:MCD) started emphasizing lower-priced items instead of the “Extra Value Meals” in order to increase profit and boost sagging same-store sales. The strategy seems to have taken hold: Same store sales are now on the upswing, and after a pause in earnings growth in 2012, McDonald’s resumed its upward momentum this year, albeit at a relatively slow 2% pace so far.

The company’s other fundamentals are in good shape. It has a manageable long-term debt-to-equity ratio of 0.88 and cash flow of more than $1 billion. Its P/E ratio of 17 is low compared to historical standards and industry rivals.

McDonald’s Corporation (NYSE:MCD) is also a dividend grower, having increased the payout every year since it introduced one in 1976. It has a compounded annual dividend growth rate of 21%. This looks like another good stock for a retirement income portfolio.

The long and short of it

Even if the aggregate earnings of S&P 500 companies are poised for a slowdown, there are still businesses out there that will grow. Keep an eye out for fundamentally strong companies like the ones I discussed above, and you’ll achieve long-term investing success in any market environment.

The article Should You Be Worried That Corporate Earnings Are Slowing Down? originally appeared on and is written by Mark Morelli.

Mark Morelli owns shares of McDonald’s, Johnson & Johnson, and Boston Beer. The Motley Fool recommends Boston Beer, Johnson & Johnson, and McDonald’s. The Motley Fool owns shares of Boston Beer, Johnson & Johnson, and McDonald’s.

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