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McDonald's (NYSE:MCD) is a familiar fast food industry pioneer. You know McDonald's, I know McDonald's, and you know that I know McDonald's. Its success and status as a household name make it one of the most-researched stocks. Should investors restrict their research in stocks like MCD because they are well-known?

Not at all. On the contrary, investment returns are ultimately dictated by financial performance, not fame or the visibility of the golden arches on Main Street. Independent research allows investors to go beyond the stocks featured in the news and shop lesser-known alternatives. As simple as it sounds, you are better off shopping around than using the media or marketing campaigns as a filter that selects for familiar or popular stocks.

Regardless of McDonald's popularity, its earnings and future cash flows will determine its value. The future financial potential of a stock can be gauged by using financial metrics to determine how cheaply a stock is priced, its ability to weather hardship and its growth potential.

As alternatives to MCD, consider the following stocks with strong track-records and solid credit scores:

Ticker

Company

Industry

10-Year Average ROE

Altman Z-score

(NYSE:DRI)

Darden Restaurants

Restaurants

23.1%

3.4

(NYSE:EMR)

Emerson Electric Co.

Industrial Equipment & Components

19.9%

4.4

(NASDAQ:MAT)

Mattel Inc.

Toys & Games

21.8%

5.3

(NASDAQ:NTRI)

Nutrisystem, Inc.

Consumer Services

38.9%

8.1

(NYSE:NUE)

Nucor Corporation

Steel & Iron

17.1%

3.7

(NASDAQ:PETS)

PetMed Express Inc.

Drug Delivery

43.8%

22.9

(NYSE:RES)

RPC Inc.

Oil & Gas Equipment & Services

17.2%

6.6

(MCD)

McDonald's Corp.

Restaurants

20.9%

6.4

Like MCD, these alternative stocks are all categorized as "safe" according to the Altman Z-score,* indicating that they are not considered bankruptcy risks. Moreover, the average 10-year return on equity demonstrates that each of these stocks have grown shareholder wealth faster than 15% per year. It is clear from these two metrics that each of these seven alternative stocks is high quality.

What's more, these stocks are cheaper, pay a greater dividend yield, and have better growth prospects than McDonald's:

Ticker

P/E

P/S

P/B

Dividend Yield

EPS growth next 5 years

DRI

14.88

0.81

3.64

3.5%

12.3%

EMR

16.09

1.59

3.73

3.1%

12.4%

MAT

15.61

1.71

4.41

2.9%

10.6%

NTRI

16.01

0.77

4.09

6.1%

14.0%

NUE

18.53

0.72

1.92

3.2%

24.9%

PETS

15.97

1.1

3.22

4.0%

11.4%

RES

7.64

1.27

2.99

3.1%

23.5%

MCD

18.98

3.79

7.67

2.8%

10.4%

Based on lower price multiples and higher dividend yields, these stocks are cheaper than MCD at current market prices. Better yet, they have better growth prospects according to analyst projections. Rather than restrict yourself to concentrated investments in a familiar stock, consider a diversified mix of these seven securities as a more attractive alternative.

Of course, you can still enjoy your chicken nuggets without being an investor.

*Please read the article disclaimer for this article and Altman z-score calculations.

Source: 7 Stocks With More Value Than A Value Meal