Johnson Controls Inc (JCI), Williams-Sonoma, Inc. (WSM): 4 Consumer Cyclicals With Income & Growth

McDonald’s Corporation (NYSE:MCD)’s market conditions have already started to improve in these two regions, as suggested by May same-store sales growth of 2.4% year-over-year in the United States and 2.0% year-over-year in Europe. These two markets combined account for as much as 73% of the company’s total revenues. However, McDonald’s great potential lies in emerging markets, where the rising ranks of middle class will be able to afford McDonald’s products in the future.

Therefore, the company is slowly shifting its focus to new markets, such as China, where it plans new store additions. McDonald’s sales should rise between 3% and 5% and its operating income will be up by between 6% and 7% in 2013. Should the global economy accelerate growth, McDonald’s outlook could improve further. This S&P Dividend Aristocrat is offering a decades-long track record of dividend growth, with a forward yield of 3.1% on a payout ratio of 54% of the analysts’ current-year EPS consensus estimate.

Final thoughts

While elevated valuations warrant caution, there are still several dividend plays in the sector that can benefit from the positive trends in the overall economy and in their respective industries. Some still boast valuations below the average for the consumer cyclical sector, and McDonald’s, Packaging Corp, Williams-Sonoma and Johnson Controls Inc (NYSE:JCI) are all worth keeping a close eye on. To continue reading about all things finance, check out this market-beating strategy.

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