Behind the overall stock market numbers, many individual sectors move in different ways at different times. Some sectors tend to be runaway winners some years, but are highly cyclical and trend lower in others.
Other sectors tend to be steadier, and could hold up well if the overall market has a poor year. Looking to 2025 and the market’s early struggles so far, investors may want to look for safety in an underperforming space.
That space is the restaurant industry. While rising costs have kept a lid on the sector, it’s one area where consumers are still willing to go out and spend. And the industry continues to look for new ways to satisfy consumers and bring them back with special meals and delivery options.
That could bode well for fast food industry leader McDonald’s (MCD). The burger giant closed 2024 up less than 5%. But rising meal deals and improved efficiency can continue to improve the bottom line, which should lead to increased profits over time.
Action to take: Investors may like shares here as a more defensive way to play today’s markets. Investors can also get a 2.4% dividend at today’s prices, which the company has a history of increasing over time.
For traders, the March $305 calls, last trading for about $5.30, could see mid-double-digit returns in the months head on a further uptrend in shares over the spring.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.