There are no safe havens in the stock market. Every stock carries risk. But some less than others. This column features stocks that have shown one or more of the following characteristics: less volatility, better earnings, larger market caps, safe and increasing dividends. In these times of turmoil, our goal is to show readers better opportunities for investing with fewer risks.

September 8, 2008 - McDonald's Corp. (MCD-NYSE) together with its subsidiaries, franchises and operates McDonald's restaurants worldwide. Its restaurants offer various food items, soft drinks and other beverages. The company recently sold its minority ownership interest in the U.K.-based Pret A Manger. As of December 31, 2007, McDonald's Corporation operated 31,377 restaurants in 118 countries, of which 20,505 were operated by franchisees; 3,966 were operated by affiliates; and 6,906 were operated by the company. The company was founded in 1948 and is based in Oak Brook, Illinois.

That's what made this stock such a performer: earnings. For the last 5 years, they've grown, on average, 17.55% a year. Over the next 5 years, analysts see some slowing with increases projected at 10.45% a year, on average. In 2005, earnings per share (eps) were $1.97, then went to $2.30, followed by $2.91 last year. This year, analysts see $3.52 and next year, $3.80. Next announced earnings will be for the September quarter with expectations of 95 cents a share, up from 83 cents last year. The December quarter should be 82 cents a share, well above the 72 cents in the same quarter last year.

In the second quarter, revenues gained 4% to $6.075 billion while earnings were up 31% to 94 cents. A big part of the story is international growth, a trend most analysts see continuing for several more quarters.

Global same-store sales were up 8% in the quarter, compared to an increase of 6.1% same-store sales for the company as a whole. For the U.S. alone, same-store sales were up 6.7% in July, showing that higher gas prices and lower home values aren't keeping consumers at home. The three strong sales items recently have been chicken, breakfast and beverages. Two new offerings, Southern Style Biscuit and Southern Style Sandwich, are seeing strong demand. Analysts think breakfast, beverages and extended hours will boost growth for the near future.

More numbers: Market cap is $69 billion on 1.12 billion shares outstanding. Return on Equity is a remarkable 29.71% for the last 12 months. Profit margin is 19.2% with an Operating margin of 25.78%. Price to Earnings (p/e) is 16. Price to Sales is 2.9. Institutions own 75% of the shares. The dividend is $1.50 as of this writing, having gone from 55 cents in 2004, to 67 cents in 2005, then $1.00 in 2006, and $1.50 in 2007. The company has an A++ Financial Strength rating in Value Line. Current ratio is 1.28 (current assets divided by current liabilities). Debt to Equity is .76.

Conservative investors should like the size of the company, size from many different perspectives: total revenues, total profits, market cap, and dividend. While the valuation is not high, it's about average for the p/e ratio over the last 5 years. Because of its size, it would be a surprise to see a catalyst catapult these shares a lot higher. On the other hand, it would be hard to imagine a scenario that would bring them crashing down.

- Company Web site: www.mcdonalds.com

- Ted Allrich