Stocks Flavored Pie(VI)

Food is one of the basic needs of human beings and its on the first level in Maslow Hierarchy of Needs. What is more pleasant and at the same time pressing than finding a good restaurant for your lunch or dinner time?

I remember that when my wife was pregnant, the trip abroad was a fiasco from this point of view. We would end changing the restaurants two three times, until we found one where she would be able to eat. During our “explorations” we (and I mean me) had the luck to find a wonderful restaurant that served some amazing lunch plates on bread, like a big sandwich. Not to mention my review was something like : Going with your pregnant wife to eat something is your personal Hell, but finding a restaurant so good you come a second time, it means that restaurant is a piece of Heaven!. And we definitely had the luck to find a good Ratatouille in another bristo.

Restaurants and bars should definitely have the option to invest in. But I think small restaurants for locals, the type that serve awesome food but are kept in ‘the family’, usually don’t cut it to this kind of list. But there is another kind of restaurant you usually find EVERYWHERE, restaurants that are in the Fast Food category like McDonalds, KFC, Wendy, and so on.

Before skipping to the next part of the article, just take a look on the previous list:

McDonald’s

Who doesn’t know McDonald’s (MCD). They are everywhere and they have a long tradition in the fast food industry. One of the things that make me pick MCD (even if I was in doubt to take KFC), is that MCD is special in a way, as they are also one of the biggest real estate investors (if you have the time, look at The Founder movie).

MCD dividend is 2.40% and that translates to 1.29USD per stock. They are paying dividends 4 times a year and the next reporting earnings will be around the end of January. MCD is currently undervalued and has been on the bad side of analysts for some times now. It is presumed that MCD will probably hit 240USD for the stock price, as they are changing their sales strategies. A plus side for McDonald is their continuing investments in technologies (and strategies to attract new investors).

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Their stock price is still rising despite everything and they suppressed their price level before pandemic.

McDonald’s is improving the relationship with its franchisees, as sales trends have improved and corporate management provided extra support amid the pandemic.

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Adding MCD to our list pushed our ANR to 5.68% and now it’s time for our last stock to this PIE (at least for the time). I forgot to mention one thing, one of the reasons I invest in MCD is that I consider it a safe stock. I don’t see it fall too soon or too fast, because they have so many to keep them afloat. Even if they have a slow growth in the future, they pay really good dividends.

Starbucks

Who doesn’t like a good coffee? To be honest I would prefer to drink one coffee at a nice coffee shop, with a view, but you always count on Starbucks to provide you with a cozy atmosphere, good cookies and the drink you need.

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SBUX is at ATH for the moment, closing @106UD in the last trading sessions, and we may see a correction, from a technical view.

One other reason to invest in SBUX is that they pay dividends, 4 times a year, of 1.73% (this was the last one). From a perspective view, they recently changed their CFO and this was seen as a good sign by potential new investors (but to be honest, I don’t have an opinion on this).

In the last quarter Starbucks reported results that beat the expectation and they were helped by a faster than expected recovery from the coronavirus.

SBUX has some future plans, like diversification of their menus with new beverages and I think it will bring some more new customers (and endorse their current ones). Overall, SBUX is a buy for me, including the potential correction in the next 6 months (I see the stock price fall to the 85-90USD range).

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With Starbucks here, our ANR is up to 6.08%. I am happy with this return (not counting the dividends) but the story doesn’t end here.

An apology

I wanted to configure the PIE in this article, but I decided I want to present you more of my configuration idea and start this PIE together. In the next article we will play with the numbers, make the first deposit and set the goals.

Also I am sorry that this article and maybe the last ones were a bit shorter, I tried to compress the information to end the miniseries in 6 parts, but I was soon to realize it will mess up the layouts (on the bright side, we don’t have 8 parts…only if you enjoyed the series…did you? want another one? don’t be shy).

Thank you for your patience and see you in the next and final part of our story!

P.S. Header Photo by Jonathan Borba on Unsplash

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