Better Buy: McDonald's vs Yum!

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McDonald's has been a dud in 2012, while Yum! Brands has continued to outperform, but with that run has come a premium multiple. 

So which stock is a better buy today: the cheaper, underperforming McDonald's or the rosier and more expensive Yum! Brands?

Mickey D's has a more sustainable long-term model than just about any company in this space, and has a low price-to-earnings ratio right now. In a world of short-termism, it's easy to forget that the best investment is measured in years, not quarters, and when you take a look at McDonald's long-term trend, investors are getting a bargain, making McDonald's the better buy today.


One of the reasons is McDonald's superior dividend, which at 3.7% is higher than the broad market. As good as it is, there may be better income plays out there. You can uncover "The 3 Dow Stocks Dividend Investors Need" today in this new report. It's absolutely free, so just click here and get your copy today.

The article Better Buy: McDonald's vs Yum! originally appeared on Fool.com.

Austin Smith owns shares of McDonald's. The Motley Fool owns shares of Arcos Dorados, McDonald's, and Starbucks and has the following options: short JAN 2013 $47.00 puts on Starbucks. Motley Fool newsletter services recommend McDonald's and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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