McDonald's Rises

McDonald's (NYSE: MCD) recently delivered appetizing quarterly results, despite the ugly economic environment. First-quarter net income increased 3.5 percent to $979.5 million, while sales dropped 9.5 percent, to $5.08 billion. (Excluding currency conversion, sales would have risen 2 percent.)

Proving its continued popularity with consumers, McDonald's "same-store" sales (for units open a year or longer) rose 4.3 percent overall, 4.7 percent in the U.S., 5.5 percent in the Asia/Pacific, Middle East and Africa segment, and 3.2 percent in Europe.

McDonald's has been known as a winner in the current economic environment, as consumers reduce their spending. Their search for deals hasn't made life easier for other discounters, though. Burger King recently disclosed a drop in traffic in its fiscal third quarter, with same-store sales rising only 1 percent.

Shares of the Golden Arches were recently trading with a price-to-earnings (P/E) ratio of around 14 — in line with Burger King, yet cheaper than Yum! Brands' 18. It doesn't seem dirt cheap, but its continued solid performance and the fact that it's a steady dividend payer (with a yield recently north of 3.5 percent) make for a strong investment thesis right now.

Over the past several years, McDonald's has proven that it's a winner in good times and bad, which is impressive for any company. It remains a strong candidate for longterm portfolios.