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Stick With McDonald's

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  • Description

    Haverford CIO Hank Smith on the future of the markets and why you should invest in dividend-paying stocks.

  • Duration 3:34
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-- -- -- the last twenty minutes market three -- things have been news stocks really rising on the back.

But the president did have that meeting with house speaker John Boehner they spoke for about 45 mess.

Tanks met here for chief investment officer is here now with his reaction.

As well do you feel any better now knowing.

That -- you're speaking once again in a deal could be somewhat closer.

Oh absolutely and I think -- the big issue here is.

If we can bridge of the -- -- get framework.

With you can get an agreement another words avoid going over the fiscal cliff.

You're gonna have certainly replace uncertainty and that should unleashed pent up demand particularly in the form of capital spending.

Which is really been on strike during the second half of 2012.

Okay sir limited companies have been making big changes but a lot of companies -- especially those dividend payers have been.

-- -- in those dividends up to their shareholders before the end of -- year.

Does that trend deal like energy and not like it especially since we may have a -- -- Well I think it I think every S&P 500 dividend paying companies should be.

Our pain ahead a quarter or two quarter's worth of 2013.

Earnings today at a I see no justification not to do that.

In order take -- advantage.

Of taxable shareholders this unique opportunity where you know dividend taxes are going up.

Heck I -- -- -- our viewers know we're just showing some -- video we just got -- moments ago from house speaker John -- returning to Capitol -- he didn't make any statements but obviously are gonna monitor that of course for the market that are for our viewers as Bob -- -- bring up a couple of names that you really like -- to get you are sticking with those dividend payers has been so much controversy.

With whether or not we should indeed be staying with dividend names that you really like.

McDonald's.

What are the biggest -- one of the bigger names with followed music stick with this one no matter what happens with the Clinton right.

Well I think you don't you don't have to worry about the economy -- McDonald's we're told it's gonna do well whether we go into a recession or whether we keep expanding.

And you have a dividend yield that's almost twice that of what it pays on its ten year debt three and a half percent vs their ten year debt about one point 8%.

So you're getting double B in common and you're gonna get growth and income because I believe McDonald's will continue its forty year plus trend of increasing dividends each year -- The woman -- -- but -- but at a McDonald's has not continued especially year today the stock's down about 11% year today what you think surprises many considering.

There global threat but footprint that they had that's an issue.

There's a stock.

Well that's right but I think part of that is McDonald's did so well in 2011.

In 2000 intend.

And if it's just -- and allowing the fundamentals to catch up a little bit.

Our analysts who follow it -- Norfolk Southern you also like this -- another dividend Payer and the answer rail line and mean we're gonna have to keep shouting things obviously.

Over the next year but again this is -- your other topic and that dividend space but you're trying our viewers to go ahead and do no matter what.

Well yes and and little bit more economic exposure -- than McDonald's.

-- and if this stock has come down pretty significantly because of the fears of coal.

And the United States getting out -- coal business were knocking get outlook coal business.

All that's a big part of Norfolk Southern's.

Rail transportation.

They -- they do a lot of other things as well we think this is a good buying opportunity at a very attractive price and above average yield.

All right Hank Smith thank you very much again markets really liking what they're saying another meeting between the president speaker Boehner.

We're gonna of course -- -- they can't.

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