McDonald's Corp.

McDonald's Corp. (MCD - Analyst Report) just reported a global same-store sales increase of 8.2% in October. Sales were particularly robust in Europe, Asia, Africa and the Middle East. Domestic same-store sales increased by 5.3% thanks to new menu items like the Southern Style Chicken sandwich, continued demand for breakfast items and popular Dollar Menu items.

Company Description

McDonald's is a well-known fast food chain with more than 30,000 local restaurants serving 52 million people in more than 100 countries each day. More than 70% of McDonald's restaurants worldwide are owned and operated by independent proprietors

Stellar Sales

The company just reported a global same-store sales increase 8.2% in October. Sales were particularly robust in Europe, Asia, Africa and the Middle East. Domestic same-store sales increased by 5.3% thanks new menu items like the Southern Style Chicken sandwich, continued demand for breakfast items and popular Dollar Menu items.

Quarterly Results Reflect Strong Growth

The company’s third quarter showed a year-over-year profit of 11% thanks to a boost seen in worldwide sales. MCD's earnings per share of $1.05 surpassed the previous year's total and came in 8.25% above analyst expectations. On average, the company exceeded consensus estimates by 8% over the past 5 consecutive quarters.

Revenues increased by 7% to $6.3 billion from $5.9 billion in the year ago period.

Strong worldwide sales growth of 7% contributed to a robust third quarter. In the U.S., third-quarter comparable sales jumped 4.7%.

Europe continued to be hot as sales increased 8.2%. Asia/Pacific, Middle East and Africa remained strong with 7.8% growth led by Australia and China. The growth drivers in Asia/Pacific were breakfast, core menu extensions and value.

Domestically, the quarter saw its highest sales increase in 2008 thanks to sales of the Big Mac and value-based beverages.

Higher Income and Solid Fundamentals

The fast food giant also boosted its dividend by 33% to 50 cents per share. MCD noted that the dividend is payable December 15 to shareholders of record on December 1. The company is yielding 2.8% in an industry that virtually pays no income. McDonald's offers a return on equity (ROE) of 28%, which is more than double the industry average of 11%. The company's net margin of 19.4% soars past the industry average of 2.8%.

The company is seeing bullish forecasts. Analysts boosted full-year 2008 earnings estimates to $3.61 per share from last month’s $3.53, which included an increase of 1 cent during the past week.

Read the full analyst report on MCD