Buying and holding high-quality stocks is a fantastic way to predictably generate wealth over long periods of time. For investors looking for relative stability in the stock market, it pays to consider large-cap stocks — that is, generally speaking, businesses with a market capitalization of at least $10 billion.
But not all large-cap stocks are created equal. So we asked three top Motley Fool contributors to each choose a large-cap stock they believe investors would do well to consider buying this month. Read on to learn why they chose…
Thriving in good markets and bad
Steve Symington (McDonald’s): Even as the broader markets have stumbled amid rising trade tensions and macroeconomic concerns, McDonald’s has rallied to fresh all-time highs as investors celebrate the fast-food giant’s improved U.S. market results. To be sure, domestic comparable-store sales growth has accelerated to 4.5% to start 2019 (up from a stagnant 2% in recent quarters) as McDonald’s enters the final year of its “Velocity Growth Plan,” nicely complementing the 6% comps increase achieved by international locations and indicating that the ambitious three-year initiative is starting to yield fruit.
That’s not to say McDonald’s has an easy path to sustained profit growth going forward. The fast-food niche is exceptionally competitive, and food costs will almost certainly increase in the coming quarters thanks to an outbreak of African swine fever that industry experts predict will not only increase pork prices for at least two years as a direct consequence, but also bolster chicken and beef prices as the world supplements its appetite for protein.
Here again, however, McDonald’s is well-versed when it comes to mitigating the impact of such events, however extreme: CEO Steve Easterbrook has already stepped out to say the outbreak “hurts McDonald’s a little,” but should be largely minimized by the company’s “well-established supply chain and hedge” capabilities.
As other, less dominant restaurant chains suffer, I think McDonald’s should be poised to continue outperforming.
An industrials player with a great dividend pedigree
Keith Noonan (Dover): With a market capitalization of roughly $13.5 billion, Dover is a company that sits toward the smaller end of the large-cap spectrum. It also tends not to grab headlines to the same extent than its more exciting large-cap peers do, but the industrial equipment company has an appealing returned-income profile and a sturdy business that make it a worthwhile candidate for investors seeking dependable performers.
The company’s business revolves around products like pumps and fluid systems for gas refueling and other industrial uses, commercial refrigeration systems, and food services equipment. That might look a bit boring when compared against the more highly scalable businesses of some other prominent large caps. However, boring can be an attractive characteristic — particularly with markets seeing volatility tied to the uncertain outlook on international trade.
Many of the product categories that Dover specializes in appear unlikely to…
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