"Team Alpha" sold McDonald's (MCD) at nearly its all time high when we took profits (review the action here). It is time to add McDonald's back into our core portfolio as of today.
Our "Team Alpha" portfolio consists of ExxonMobil (XOM), Johnson and Johnson (JNJ), AT&T (T), General Electric (GE), Annaly Capital (NLY), Southern Company (SO), Procter & Gamble (PG), Philip Morris (PM), Intel (INTC), Realty Income (O), Chevron (CVX), E.I. du Pont (DD), Duke Energy (DUK), Coca-Cola (KO), and Bank of America (BAC).
Action To Take
We sold McDonald's at $99.00/share and added a healthy gain of $7.00/share right into our cash reserves to deploy on the market dips.
After reviewing our current portfolio, the obvious stock to add back into our portfolio is McDonald's since it is now selling below the price we paid for it originally back in October 2011.
McDonald's: Price: $90.88/share, Dividend Yield: 3.10%, ESS Rating: Bullish
Adding to the value pricing is the dividend yield which is back above 3% and offers both a capital appreciation opportunity as well as a decent dividend while we wait for the share price to rise once again.
The company has been a stellar performer, will continue to be the "big dog" in the fast food restaurant sector, and at these price levels, is now a bargain.
My Opinion
Moving ahead with our "Team Alpha" retirement strategy, adding MCD back into our core with a 100 share purchase from our existing cash reserves of about $18k makes perfect sense.
At the same time, we will still have more than $9k in reserves and we can begin evaluating selling some covered calls to rebuild our reserves once again.
We will add McDonald's today.
Additional disclosure: I will be adding MCD to my core portfolio sometime today.
