Feast or Famine: Fast Food Stocks to Buy and Hold Forever

Written By Mike Munno

Posted May 30, 2023

The fast food industry is a large and growing market, with over $1 trillion in annual sales. The industry is also highly competitive, with a number of well-established brands vying for market share. For investors, this means that there are a number of attractive fast food stocks to choose from.

There are several reasons why investors turn to fast food stocks. Fast food stocks are often seen as recession-proof investments. This is because fast food is a relatively affordable option for consumers, and it is often seen as a comfort food during tough times.

Fast food companies tend to generate consistent earnings, even during economic downturns. This is because they have a loyal customer base and a well-established business model.

The fast food industry is still growing, and there is still room for new players to enter the market. This means that there is still potential for growth in fast food stocks. Another good reason to add fast food stocks to your portfolio? The dividends. 

Fast Food Stocks

Many fast-food companies pay dividends to their shareholders. This can provide investors with a steady stream of extra income. But that’s just one of the reasons these companies are good wealth-building tools. So let’s get into it. 

These are the best fast food stocks to consider adding to your portfolio…

Fast Food Stock #3: Yum! Brands (YUM)

Yum! Brands, Inc. is a restaurant company that owns the KFC, Pizza Hut, and Taco Bell brands. The company has a strong portfolio of brands that appeal to a wide range of consumers. Yum! Brands have also been investing in international markets, which has helped the company to grow its revenue and earnings.

In fact, in 2021, 65% of Yum! Brands’ revenue came from outside of the U.S. The international growth potential is a major attraction for investors. International growth isn’t the only attractive aspect of this fast food stock, though. 

Yum! Brands has paid a consistent dividend to its shareholders for the last 17 years and counting. The latest dividend yield came out to 1.86%. In addition to paying a consistent dividend, the management team is very strong.

The CEO, David Novak, has been with the company for 30 years and helped grow them into a global leader among fast food stocks. Overall, Yum! Brands is a good investment for investors who are looking for a company with strong brands, international growth, a history of dividend payments, and a strong management team.

In the last decade, Yum! Brands have managed to grow 223% whereas the S&P 500 Total Return index returned only 209%. 

Fast Food Stocks vs S&P 500 Chart

But if you look closely, at that chart, you’ll notice there are two other fast food stocks that performed better than YUM…

Fast Food Stock #2: Domino’s Pizza, Inc. (NYSE: DPZ)

Domino’s Pizza, Inc. (NYSE: DPZ) might not be the first company that comes to mind when you think of fast food stocks, but maybe it should. Dominos is a global pizza delivery company with a strong brand and a loyal customer base. The company has been investing heavily in technology. Investing in tech has helped it to improve its efficiency and reduce its costs. As a result, Domino’s has been able to generate strong earnings growth.

Domino’s is the world’s largest pizza delivery company, with over 18,000 stores in over 90 countries. The company has a strong brand and a loyal customer base. Domino’s has been able to maintain its strong brand by consistently delivering high-quality pizzas at a reasonable price. The company has also been able to maintain its loyal customer base by offering a variety of delivery options and by making it easy for customers to order pizzas online or through a mobile app.

As stated earlier, Domino’s has been investing heavily in technology. This includes new ovens that cook pizzas faster and more evenly. Domino’s has also invested in new delivery systems that allow the company to deliver pizzas more quickly and accurately. As a result of these investments, Domino’s has been able to reduce its costs and improve its margins.

Domino’s has been able to generate strong earnings growth in recent years. They were even growing at 20% each year until 2022. Domino’s earnings growth has been driven by strong sales growth, margin improvement, and share repurchases.

DPZ also pays a dividend. Dominos' last dividend yield was 1.61%. The company is also a good investment for investors who are looking for a company that is investing in technology to improve its efficiency and reduce its costs.

Fast Food Stock #1: McDonald’s Corporation (NYSE: MCD)

It should be no surprise that McDonald’s Corporation (NYSE: MCD) is the top fast food stock. It is the world’s largest restaurant chain, with over 39,000 locations in over 100 countries. The company has a strong brand and a loyal customer base. This top fast food stock has been able to maintain its strong brand by consistently delivering high-quality food and service at a reasonable price. 

The fast food giant has also been able to maintain its loyal customer base by offering a variety of menu options and by making it easy for customers to order food online or through a mobile app.

McDonald’s has been investing heavily in new products and services, which has helped it to attract new customers and retain existing customers. Since taking the reigns of CEO in 2019, Chris Kempczinski has pushed innovation. 

The company has introduced new menu items, such as the McPlant, and it has also invested in new technologies, such as self-order kiosks. As a result of these investments, McDonald’s has been able to grow its sales and earnings in recent years. Did I mention that McDonald’s has paid a dividend for over 40 years? It’s also the highest dividend stock on this list. MCD’s last dividend payment was 2.13%. 

The 411 on Fast Food Stocks

There are a number of reasons to add these fast food stocks to your portfolio. Whether you’re looking for a recession-proof stock, or want to start collecting dividends. There is a fast food stock for anyone. 

Fast food stocks offer an appetizing investment opportunity, and by delving into the world of McDonald's Corporation (NYSE: MCD), Yum! Brands, Inc. (NYSE: YUM), and Domino's Pizza, Inc. (NYSE: DPZ), we have uncovered the potential for mouthwatering returns. These three fast-food giants have established themselves as leaders in the industry, capitalizing on changing consumer preferences and exhibiting resilience even during challenging times.

Investing in fast food stocks can be a recipe for success, as these companies continue to innovate, expand their global footprint, and adapt to evolving market dynamics. With their strong market positions, diverse product offerings, and commitment to customer satisfaction, McDonald's, Yum! Brands, and Domino's Pizza are well-positioned to satisfy both investors' hunger for growth and consumers' cravings for delicious dining experiences. 

Start your journey into the world of fast food stocks and discover the flavors of financial growth. Stay hungry for knowledge and continue exploring the wealth of information on fast food stocks and other investment opportunities at Wealth Daily. 

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