This creates a steady stream of income for McDonald’s Corporation (NYSE:MCD). In fact, this rent and royalty income is one of the reasons McDonald’s has been able to pay its shareholders a dividend every year since 1976. Today McDonald’s stock boasts a dividend yield of more than 3%. Moreover, as McDonald’s Corporation (NYSE:MCD) is the world’s largest restaurant company by revenue, even the most cautious investors can rest assured that it will be in business for many more years to come.
Take a straightforward approach
Some of the best stocks available today are those with recognizable brands. Think PepsiCo, Inc. (NYSE:PEP), The Coca-Cola Company (NYSE:KO), or, yes, McDonald’s. While more in-depth research is important, choosing companies you know with business models that you understand is a great starting point for new investors. This seems obvious, perhaps too easy, but take a closer look at a stock such as PepsiCo, Inc. (NYSE:PEP) and it’s clear why this is a smart long-term investment.
Unlike its rival pop star The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NYSE:PEP) doesn’t rely on beverage sales alone. Pepsi is the largest snack-food company by market share in the world today: PepsiCo, Inc. (NYSE:PEP)’s Frito-Lay business brings in an estimated $13 billion each year. Additionally, Pepsi’s stock is one of the S&P 500’s dividend aristocrats — yet another reason the stock is a great fit for new investors. The Dividend Aristocrats Index includes S&P 500 companies that have consecutively increased their dividends for at least 25 years running.
This means new investors don’t need to worry that PepsiCo, Inc. (NYSE:PEP) might cut its dividend anytime soon — particularly since the soda and snack giant has been paying a dividend since 1965. Today, Pepsi’s stock trades around $83 a share and boasts a dividend yield of 2.6%. With strong brands and consistent earnings, both PepsiCo, Inc. (NYSE:PEP)’s and McDonald’s stocks should continue to reward investors over the long haul.
What’s next?
For patient investors there is no shortage of opportunity in the stock market today. Continually learning how to be a better investor is key, not only for beginners, but for seasoned investors as well.
The article The Best Food Stocks for New Investors originally appeared on Fool.com and is written by Tamara Rutter.
Fool contributor Tamara Rutter has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola, McDonald’s, PepsiCo, and TD AMERITRADE. The Motley Fool owns shares of McDonald’s and PepsiCo.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
