#7 - McDonald’s (NYSE:MCD)
The last of the defensive stocks on this list is McDonald’s (NYSE: MCD). The iconic fast-food chain was working to develop the digital side of its business. And that paid off in a big way during the pandemic. MCD stock soared as the company kept its drive-thru windows open and the revenue followed.
That growth stalled in the first part of the year, but the stock has broken to a new record high since the company reported earnings in July. The company recently announced that it was going to be increasing employee pay from $11 to $17. This should help the company attract workers as it looks to open its dining room which remains mostly shut as of this writing.
And if investors needed a different reason to take a bite out of McDonald’s stock, they can look at the company’s dividend, which the company has increased in each of the last 45 years.
About McDonald's
McDonald's Corporation operates and franchises restaurants under the McDonald's brand in the United States and internationally. It offers food and beverages, including hamburgers and cheeseburgers, various chicken sandwiches, fries, shakes, desserts, sundaes, cookies, pies, soft drinks, coffee, and other beverages; and full or limited breakfast, as well as sells various other products during limited-time promotions.
More- Current Price
- $288.49
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 17 Buy Ratings, 10 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $319.57 (10.8% Upside)
A strategy to buying defensive stocks is to buy them before you need them. With the way the stock market is moving at the moment, it may be easy to think that it’s too late to buy defensive stocks. The Dow swung 900 points to the downside on July 19 only to recover all those losses, and then some, in the next 48 hours.
And yet, you can’t blame investors for feeling a little uncertain about a market that by many accounts is highly overvalued. Whenever the market does lurch downward, it’s only natural for investors to wonder if this is the start of a stronger correction.
We can’t say when that will occur.
That’s a risk that every investor has to manage for themselves. One way to manage the risk is to invest in defensive stocks that will act as a hedge in your portfolio. And if you’d rather mitigate your risk even further, you can look at an exchange-traded fund (ETF) that tracks the S&P 500 index such as the Vanguard 500 Index Fund ETF (NYSEARCA:VOO).
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